by Peter Kusnic
November 12, 2020
China’s massive Belt and Road Initiative continues to fuel investment in strategic infrastructure development to connect China to Europe, the Middle East, and parts of North Africa for commercial and tourism purposes, with additional plans for other global regions, notably Latin America.
Despite near-term slowdowns in spending due to the Covid-19 pandemic, and ample criticism of Belt and Road’s feasibility and long-term returns, the sprawling project is creating significant opportunities for global asphalt suppliers, according to a new Freedonia Group analysis, which projects global asphalt demand to grow 2.4% per year through 2024. In addition to Belt and Road, global market gains will be driven by key trends in the dominant paving market, such as:
In the sizable (though much smaller) roofing market, asphalt sales will be supported by global building construction activity as the Covid-19 pandemic recedes and economies and construction levels renormalize.
China’s Belt and Road plans comprise six economic corridors:
Completed, these corridors would span some 80 countries, including many on the original “Silk Road” of centuries past. The prevalence of developing countries with lacking paved road networks along China’s planned route will support asphalt demand growth the Belt and Road project progresses. Russia in particular is a key partner due to its geographic importance to realizing many of the project’s goals.
However, the initiative is also buoying demand in more developed markets, such as Italy, a significant recipient of Belt and Road funding to improve its rail and highway systems.
In addition to Belt and Road, rapid growth in the development of highway systems in India and Indonesia will bolster paving asphalt demand gains in the Asia/Pacific region:
Through 2024, asphalt demand in mature markets in North America and Western Europe will be restrained by the maturity of local infrastructure networks as well as slow anticipated recoveries in construction activity in many countries as the Covid-19 pandemic recedes. Though demand will be supported in these markets by regular highway repaving and steady reroofing activity (particularly in the US, where asphalt shingles and other bituminous roofing are popular in both residential and nonresidential applications), opportunities are expected to be limited.
For instance, in the US:
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About the Author:
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.
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