Asphalt is widely used as a construction material for highway construction and repair work due to its efficiency and cost-effectiveness. It helps in laying down a durable and waterproof surface for roads, parking lots, pavements, and driveways. The use of hot and cold asphalt mixes for new road construction and expansion of existing highways and inter-city roads has been growing substantially in recent years. The global asphalt market is estimated to be valued at US$ 246.59 Bn in 2023 and is expected to exhibit a CAGR of 23.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The increasing demand for asphalt from road construction activities presents a huge market opportunity. Several governments across the globe are investing heavily in road infrastructure development projects to boost transportation and mobility in their countries. As per estimates, the global road construction market is projected to grow at a CAGR of over 6% between 2023-2030. A significant portion of this investment will flow into the asphalt market as it remains one of the most widely used surfacing materials for roads and highways. The growing road network length coupled with maintenance and repair requirements of the existing roads are expected to drive substantial demand for asphalt and support the market growth over the forecast period.
Porter's Analysis
Threat of new entrants: Low capital requirements and established suppliers lower entry barriers in the asphalt market. However, large players have significant economies of scale and customer loyalty that deter new entrants.
Bargaining power of buyers: Large infrastructure projects give buyers significant bargaining power to negotiate prices. Standardized nature of asphalt also allows for substitution between suppliers.
Bargaining power of suppliers: A few large miners control global asphalt reserves giving them strong influence over prices. However, availability of substitutes in bitumen curtails suppliers' power.
Threat of new substitutes: New road surfacing materials pose a threat, but advantages of asphalt in cost and performance mean it will remain dominant for road construction in the near future.
Competitive rivalry: Presence of many regional and global construction firms results in intense competition. Large players compete on technology, service and prices to gain market share.
SWOT Analysis
Strengths: Established production networks and brand loyalty. Cost-effectiveness for road surfacing applications.
Weaknesses: Fluctuating raw material prices impact margins. Vulnerable to economic cycles affecting infrastructure spending.
Opportunities: Expand into pavement maintenance and non-road applications. Growing road infrastructure in developing economies presents an opportunity.
Threats: Stringent emission norms pose compliance challenges. Development of alternative road surfacing materials can threaten asphalt's market share.
Key Takeaways
The Global Asphalt Market Growth is expected to witness high over the forecast period of 2023-2030. The market size for 2024 is estimated to reach US$ 246.59 billion, indicating a strong demand outlook.
Regional analysis indicates North America and Europe currently dominate asphalt consumption with extensive road networks. However, Asia Pacific is poised to become the fastest growing regional market led by heavy investments in road construction from China, India and other developing countries.
Key players operating in the asphalt market are Tesla, Duracell Power Center, Durapower Group, Contemporary Amperex Technology Co., Limited (CATL), and Toshiba Corporation. Large players are focusing on development of advanced pavement technologies, recycling processes and solutions to reduce emissions from asphalt production and application
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