Asphalt Paving Mixtures and Blocks

SIC 2951

Companies in this industry

Industry report:

This category describes companies principally employed in manufacturing asphalt and tar paving mixtures and blocks made of asphalt mixed with other materials.

Industry Snapshot

Asphalt is a blackish-brown material with a consistency ranging from a viscous liquid to a glassy solid. Most asphalt is obtained as a by-product of the distillation of petroleum or other materials. Natural asphalt, rarely used by the beginning of the twenty-first century, is formed during the early stages of the breakdown of organic marine deposits into petroleum.

Asphalt is used most often in the construction of roads, parking lots, walkways, and other paved surfaces. Of the 2.27 million miles of paved road in the United States, 94 percent of them are surfaced with asphalt, including 65 percent of the interstate system. The Transportation Efficiency Act was expected to result in substantial increases to the revenue of what was a $2.2 billion industry in 2008.

The primary advantages of asphalt over concrete are cost, flexibility, and durability. Because asphalt softens when heated and is comparatively elastic, it offers a high degree of adaptability in construction applications. The physical properties of asphalt also make it less susceptible than concrete to cracking and weathering. In addition, it is more resistant to the salts and chemicals used to clear and maintain roads in inclement weather. Furthermore, asphalt is easier to remove and less costly than concrete or natural paving materials, as well as being 100 percent recyclable. An entire road surface, for instance, can be excavated and remixed for use in new surfaces.

The primary asphalt paving product is hot mix asphalt (HMA), a mixture of stone, sand, and gravel that is bound with asphalt cement. Organizations involved in this industry were the National Asphalt Pavement Association (NAPA) of Lanham, Maryland, and the Asphalt Institute's National Asphalt Training Center II in Lexington, Kentucky.

Background and Development

Historic uses of asphalt date to 3000 B.C., when natural asphalt was used to seal a reservoir at Mohenjo-Daro, Pakistan. It was later used throughout the Middle East to pave roads and seal waterworks. Pitch Lake on the island of Trinidad was the first large commercial source of the material. The development of petroleum-based materials like asphalt during the eighteenth, nineteenth, and twentieth centuries gradually replaced natural supplies.

The demand for asphalt that accompanied the post-World War II economic expansion in the United States drew primarily on petroleum-based supplies. By the early 1990s, asphalt paving mixture producers used more than 50 million barrels of asphalt per year, selling more than $4 billion worth of mixtures and blocks annually.

Asphalt sales in the final decades of the twentieth century generally mirrored the health of the overall economy, expanding through the 1980s from about $3 billion in 1982 to more than $4.5 billion by 1988. The glut in construction in the late 1980s and early 1990s, in part a result of the rapid building of the 1980s, paced the economic recession. The industry rebounded in the mid- and late 1990s.

Perhaps the most significant and most welcome development in the asphalt industry in the late 1990s was the passage of the Transportation Efficiency Act for the 21st Century (TEA-21). This legislation authorized a host of construction projects and funding and paved the way for the repair of more than 20,000 lane miles of highways in the United States, along with 3,000 miles of new road construction. The Act also provided more hands-on aid to the industry in the form of the Institute of Safe, Quiet, and Durable Highways at Purdue University. The institute, funded in part by TEA-21, was created to study the interaction of tire design and highway surfaces with a goal of increasing the comfort and durability of the nation's highways.

The federal Superior Performing Asphalt Pavements (Superpave) program, a performance-based specification system developed by the Strategic Highway Research Program (SHRP) to improve national road durability, also gained a significant foothold nationwide by the beginning of the twentieth century. Superpave is a volumetric mix system designed to resist wear and cracking due to low temperatures and a liquid-binder specification. In the late 1990s, one-third of all hot-mix asphalt projects were Superpave. Almost all 50 states had implemented Superpave binder specifications by 2000, and 39 states had adopted its volumetric mix design.

One of the most significant concerns for the industry in the middle of the first decade of the 2000s was the demand for the transportation community to find high-quality materials to renew and restore U.S. highways. Aggregates and paving asphalt are nonrenewable materials, so the supply is limited. In the mid-2000s, the United States produced 2 billion tons of aggregate annually. In response to increased demand, aggregate production was expected to increase to 2.5 billion tons by 2020.

In response to increased demand and limited supplies, the asphalt industry began to use recycled materials in mix designs. Rubberized asphalt, which incorporates crumb rubber into its aggregate mix, was first developed in the late 1960s and began to be used widely in the early 1990s. It was especially notable for incorporating scrap tires into its mix design, which was expected to reduce the nation's tire stockpiles significantly with only minimal application. An increasing number of states started to use rubberized asphalt for new highway projects. By the middle of the first decade of the 2000s, rubberized asphalt was used in more than 40 states, particularly Florida, Arizona, Texas, and California.

About 70 million tons of construction aggregate were recycled in the middle of the first decade of the twenty-first century, and asphalt pavement had become the most recycled material in the United States. The increase in waste-disposal costs, combined with heightened environmental concerns related to aggregate production and general waste, furthered the trend to using recycled materials, including old computers and electronic equipment, in asphalt paving mixtures. The NAPA estimated that U.S. taxpayers saved more than $300 million a year from recycling asphalt.

In 2002 the Federal Highway Administration (FHWA) created a national policy on recycling, expecting that the materials used to build the original highway system would also be used for repairs or maintenance. By the middle of the first decade of the 2000s, the United States had recycled more than 81 percent of all asphalt back into highway use.

Another option gaining popularity was rubblizing, a process in which a machine breaks the existing pavement into fragments, with smaller pieces on the top and larger pieces toward the bottom. A compactor then seats the particles, which are overlaid with asphalt. With rubblization, it is not necessary to dig up all the old pavement, haul it to a landfill, and build new.

The industry continued to face challenges from environmentalists, many of whom filed suit alleging that companies had violated standards required by the Clean Air Act of 1990. The situation was alleviated somewhat in 2002 when the Environmental Protection Agency acknowledged that hot mix asphalt facilities were not a major source of emissions and removed asphalt plants from its list of major sources of hazardous air pollutants.

According to industry statistics, an estimated 1,600 asphalt paving mixture and block manufacturing plants were valued at $2.2 billion in 2008, with industry-wide employment of 21,711 workers. The asphalt paving mixtures and blocks industry sector accounted for 65.4 percent of market share, or $917.6 million in shipments. The majority of plants were located in California, Ohio, and New York.

Asphalt and asphaltic paving mixtures (not from refineries) had 375 operations with shipments totaling $618.2 million in 2008. Asphaltic concrete (not from refineries) produced $238 million in 2008 from 43 plants, while bituminous road materials (not from refineries) produced $295.5 million from 32 plants. Other industry sectors in 2008 included paving mixtures, with $85.8 million in shipments; bituminous concrete, with $69.2 million; and asphalt paving blocks (not from refineries), with $48.2 million worth of blocks.

Because the addition of lime to hot mix asphalt increases the life of the road 38 percent, the Federal Highway Administration (FHWA) was developing a simple test to determine if lime was omitted from the asphalt mix. The test, called the "Fouier-Transform Infrared (FTIR) spectroscopy," could save the cost for state departments of transportation (DOTs) who have had to replace pavement prematurely because lime was omitted from the hot mix asphalt. Upon testing, FTIR spectroscopy could become the industry standard.

Road projects were forced to be increasingly postponed because asphalt production fell as a direct result of increased oil prices. Roughly 5,500 barrels of liquid asphalt per mile are required for roadway paving, and although the industry was falling short some 24,000 barrels per day, that number was projected to reach 257,000 barrels per day in 2012. Approximately 10 percent of a barrel of oil is utilized for asphalt products, compared to 40 percent a year earlier, resulting in a shortage and prices skyrocketing three times higher. According to Ken Simonson in the November 2008 issue of Purchasing, "The installation of cokers is pretty much a permanent change for refiners." Simonson added that "More of them are likely to be out of the asphalt business and that will keep up the pressure on asphalt for some time."

Current Conditions

Dun & Bradstreet listed 1,394 asphalt paving mixture and block manufacturing plants in 2010, a decrease from 1,600 in 2008. Industry-wide employment declined from 21,711 workers in 2008 to 18,930 workers in 2010, when the industry had a value of $2.1 billion. The asphalt paving mixtures and blocks industry sector comprised 65 percent of market share, with shipments totaling $798.8 million compared to $917.6 million in 2008, reflecting a stagnant economy.

While the number of asphalt and asphaltic paving mixtures (not from refineries) operations fell from 375 in 2008 to 326 operations in 2010, shipment values increased from $618.2 million in 2008 to more than $1 billion in 2010. Asphaltic concrete (not from refineries) shipments fell from $238 million in 2008 to $34.9 million in 2010. There were an estimated 14 plants that produced asphalt paving blocks (not from refineries) with product shipments totaling $39.1 million in 2010.

"Paved roads, historical emblems of American achievement, are being torn up across rural America and replaced with gravel or other rough surfaces as counties struggle with tight budgets and dwindling state and federal revenue," according to Lauren Etter writing for The Wall Street Journal on July 17, 2010. For example, Michigan had converted roads in about 38 counties from asphalt to gravel, and South Dakota altered about 100 miles of asphalt roads to gravel. Counties in Alabama and Pennsylvania began replacing asphalt roads with less expensive "poor man's pavement," as the less expensive chip-and-seal road is known. Ohio opted to let some of its asphalt roads wear away into gravel.

Industry Leaders

The asphalt industry is highly fragmented, with companies ranging from small firms engaged only in mixtures to large construction firms involved in highway paving and other construction.

Vulcan Materials Company of Birmingham, Alabama, was the largest U.S. producer of construction aggregates in the middle years of the first decade of the 2000s. The company's 2008 sales were $3 billion, about two-thirds of which came from aggregates, and it employed 9,320 people. Vulcan's revenues began to decrease as the economy moved into a recession, with a reported $2.69 billion in revenues for 2009 and $2.55 billion in revenues for 2010 with 7,994 employees.

Martin Marietta Materials of Raleigh, North Carolina, was the second-largest company in the industry, shipping 198 million tons of granite, limestone, sand, and gravel in 2006. With 4,860 employees, the company posted 2008 sales of $2.1 billion, 90 percent of which were in aggregates. The company's revenues fell to $1.7 billion in 2009 before rebounding slightly to $1.78 in 2010 with 4,471 employees, a reflection of economic turmoil within the construction markets.

America and the World

The Freedonia Group projected that the global asphalt market would increase 2.1 percent annually, with North American accounting for about 33 million tons of the 108 million tons expected to be reported in 2013. Strong demand in the Asia-Pacific region was expected to give the asphalt industry a huge boost as China in particular, as well as India, moved forward with road expansion projects. Asphalt demand in China was projected to account for 28 percent of total global demand of asphalt through 2013. However, asphalt production in Western Europe was projected to grow less than 1 percent to 22 million tons through 2013.

Research and Technology

One development in the industry in the middle years of the first decade of the 2000s was the creation of stone matrix asphalt, called gap-graded Superior Performing Asphalt Pavements (superpave). The mix helped reduce splashing and spraying on wet highways, as well as helped reduce noise. The primary advantage of superpave was its longevity.

Another type of asphalt being developed was called "foamed," or "expanded," asphalt, which was created by mixing a small amount of water with hot asphalt cement and spraying the foaming mixture into the cutting chamber of a pavement remixer or stabilizer. The foamed liquid asphalt was blended with the pulverized asphalt pavement during the in-place mixing, followed by compaction and an asphalt overlay.

Asphalt mixing plants were updating equipment capable of producing "warm mix" asphalt (WMA). WMA "was influencing the entire asphalt industry," according to John Davis in an article in Asphalt magazine on February 15, 2010. WMA would not only decrease costs but also use less fuel, which would decrease costs further and reduce emissions. Other areas of technological interest in 2010s included "timely maintenance" and "going green" according to Davis.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

News and information about Asphalt Paving Mixtures and Blocks

Material prices still squeezing construction profit
Colorado Springs Business Journal; January 18, 2012; 554 words
...for the month, by 0.6 percent, but rose 11.3 percent from a year earlier. Meanwhile, the index for asphalt paving mixtures and blocks increased 0.4 percent in December and 8.4 percent for the year. The index for new industrial buildings...
Contractors Forecast Higher Material Costs in 2013
New Orleans CityBusiness; January 15, 2013; 599 words
...8 percent, the smallest amount since 2008. The indexes for concrete products rose 2.4 percent and asphalt paving mixtures and blocks increased 4.4 percent.In contrast, the index for gypsum products soared 14 percent, which Simonson...
RISING MATERIAL PRICES, FLAT PRICES FOR FINISHED PROJECTS SQUEEZING HARD - HIT CONSTRUCTION INDUSTRY.
States News Service; November 18, 2010; 597 words
...Gypsum products declined by 0.2 percent since September but were unchanged from October 2009. Prices for asphalt paving mixtures and blocks dropped 0.5 percent in October but were still 4.8 percent higher than last year. And lumber and plywood...
Contractors Stuck Between Rising Material Prices and Flat Project Prices.
EC&M Electrical Construction & Maintenance (Online Exclusive); December 20, 2010; 502 words
...Gypsum products declined by 0.2% since September but were unchanged from October 2009. Prices for asphalt paving mixtures and blocks dropped 0.5% in October but were still 4.8% higher than last year. Lumber and plywood prices declined...
Construction Material Prices Down Slightly Beween November and December but Up for the Year, New Analysis Finds
States News Service; January 21, 2013; 700+ words
...8 percent, the smallest amount since 2008. The indexes for concrete products rose 2.4 percent and asphalt paving mixtures and blocks, 4.4 percent. In contrast, the index for gypsum products soared 14.0 percent, which Simonson said...
Materials Prices Jump 0.9% in December While Bids Stay Flat.
EC&M Electrical Construction & Maintenance (Online Exclusive); January 19, 2011; 593 words
...and gypsum products, 0.8% and 3.4%. Prices in December and the year were little changed for asphalt paving mixtures and blocks, 0.2% and 4.6%; concrete products, 0.2% and -0.2%; and insulation materials, -0.5...
CONSTRUCTION MATERIALS PRICES INCH DOWN IN NOVEMBER BUT CONTINUE TO OUTRUN YEAR-OVER-YEAR BUILDING PRICES, SQUEEZING STRAPPED CONTRACTORS.
States News Service; December 15, 2011; 668 words
...price for the month, by 1.1 percent, but rose 13 percent from a year earlier. Similarly, the index for asphalt paving mixtures and blocks declined 0.5 percent in November but posted an 8.1 percent year-over-year gain. "Prices are likely...
AGC Reports Construction Materials Prices Inch Down in November but Still Outpace Building Prices.
EC&M Electrical Construction & Maintenance (Online Exclusive); December 15, 2011; 645 words
...dropped in price for the month, by 1.1%, but rose 13% from a year earlier. Similarly, the index for asphalt paving mixtures and blocks declined 0.5% in November but posted an 8.1% year-over-year gain. "Prices are likely to be as...

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