SOURCE: The Freedonia Group Inc.

April 07, 2005 11:35 ET

Asphalt Demand in China to Reach 15 Million Metric Tons in 2008

Demand for Asphalt in China Is Forecast to Rise 6.8 Percent Per Annum Through 2008 to 15 Million Metric Tons

CLEVELAND, OH -- (MARKET WIRE) -- April 7, 2005 -- Measured in yuan, asphalt demand is expected to climb more than ten percent annually to 31.5 billion yuan. The Chinese asphalt market will experience the fastest growth among major economies in the world, driven by strong gains in road construction activity as well as healthy advances in building construction. These and other trends are presented in Asphalt in China, a new study from The Freedonia Group, Inc. (http://www.freedoniagroup.com/), a Cleveland-based market research firm.

Asphalt demand in paving applications will outperform roofing, rising 8.1 percent per year to 11.3 million metric tons in 2008, and accounting for three-quarters of overall demand in China. Market gains will be primarily driven by strong increases in road construction activity. Beginning with its very first highway completed in 1988, China has increased its highways to nearly 30,000 kilometers in 2003, second only to the US. China's national highway development plan -- known as the "7918 Network," consisting of seven routes connecting Beijing and seven major border cities, nine north-south routes and 18 east-west routes -- will expand China's highways to 85,000 kilometers during the next three decades. Asphalt has surpassed concrete in road construction and will continue to account for the majority of road paving in China.

Demand for asphalt in the roofing segment will moderate to a below average annual growth rate of 3.4 percent through 2008, despite a strong building construction market. Asphalt shingles and modified bitumen membranes will continue their inroads in the Chinese roofing market. Demand for built-up and asphalt roll roofing will continue its downward trajectory, constraining stronger market gains for roofing asphalt. While BUR and roll roofing has dominated low slope roof construction in China historically, steep slope roofing applications are increasingly being adopted by new residential constructions, thereby reducing demand for BUR and asphalt roll roofing. In addition, under China's "Flat to Slope Conversion Project," existing flat roofs, especially in the residential market segment, are being replaced with steep slope roofs, which will reduce the existing BUR and roll roofing stock.

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