Polymer Modified Bitumen Market size is forecast to reach $14 billion by 2026, after growing at a CAGR of 8% during 2021-2026. Market growth is driven by ongoing construction projects and the increasing demand for sustainable infrastructure and road pavements around the world. Polymer modified bitumen such as thermoplastic elastomer, plastomers, polymer asphalt modifiers, and so on, are widely used in rood construction, roofing, and piping, due to advantages such as superior properties and low maintenance. According to the Australian Trade and Investment Commission the Singapore government spends at least S$2 billion on public infrastructure each month. In addition, the Government-wide program for a Circular Economy, aimed at developing a circular economy in the Netherlands by 2050 is boosting the construction sector in the country. Therefore, the growth in construction sector is influencing polymer modified bitumen market growth. However, Fluctuations in raw material prices due to changes in crude oil and petroleum prices may hinder the market growth.
COVID-19 Impact
Numerous building and construction project operations have been halted, owing to the coronavirus pandemic, which is adversely affecting the demand for polymer modified bitumen in the market. No new orders can be taken over neither the existing order production could be completed during the outbreak. There has been a temporary suspension of building and construction activities in various regions. For instance, the construction output in Great Britain fell by a record 35.0% in Quarter 2 (Apr to June) 2020 compared with Quarter 1 (Jan to Mar) 2020. With the decrease in building and construction operation, the demand for polymer modified bitumen has significantly fallen, which is having a major impact on market growth.
Polymer Modified Bitumen Market Segment Analysis – By Product
The thermoplastic elastomers segment held the largest share in the polymer modified bitumen market in 2020, due to its varied properties such as storage stability, temperature stability, and rutting resistance. The product is the most widely used in the polymer modified bitumen due to its superior quality and relatively lower price. Due to the resistance of heat and UV rays coupled with superior elasticity, thermoplastic elastomers, are expected to see a huge demand in the industry in the coming years.
Polymer Modified Bitumen Market Segment Analysis – By Application
The Road construction segment held the largest share in the polymer modified bitumen market in 2020 and is growing at a CAGR of 8.5% during the forecast period, due to the consistent usage of polymer modified bitumen in highways across the globe. Modified bitumen such as thermoplastic elastomer, asphalt modifiers, and plastomers are commonly used as the organic binding material made from refined crude oil by-products. It is widely used in road construction as it is reusable and a strong binder. Asia Pacific road projects such as the Bharathmala project, in India, and the ongoing Belt and Road project, in China, are increasing the consumption of modified bitumen, thus influencing polymer modified bitumen market growth. In addition, investments in India of USD 31.650 billion have been proposed under their Smart Cities Plan for 99 cities. In the next five years, about 100 smart cities and 500 cities are expected to call for investments worth INR 2 trillion. According to India Brand Equity Foundation, the Airports Authority of India (AAI) is planning, in collaboration with private investors, the development of city-side infrastructure at 13 regional airports to build various facilities, such as hotels, car parking, and others, in order to boost their non-aeronautical revenues. Such developments in various nations are in turn boosting the demand for polymer-modified bitumen in road construction applications.
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Polymer Modified Bitumen Market Segment Analysis – By End Use Industry
Commercial construction held the largest share in the polymer modified bitumen market in 2020 and is growing at a CAGR of 8.2% during the forecast period, owing to the increased use of modified bitumen for constructing pavements, roods, parking structures, and so on. According to the US Census Bureau, in February 2020 total construction was at a seasonally adjusted annual rate of 1,366,697 which is 6.0 percent above the February 2019 rate of 1,288,951. According to India Brand Equity Foundation (IBEF), India aims to spend US$ 1.4 trillion on infrastructure in the next five years. In addition, in February 2020, a loan of $631 million to build the Vishakhapatnam-Chennai industrial corridor got approved by the Asian Development Bank. In addition, the government’s Udan scheme in India plans at making air travel affordable, by improving regional connectivity, and developing regional airports. In February 2020, the Union Budget presented has proposed creating 100 new airports by 2024 to help growing air traffic under the Centre’s Udan scheme. The governments of countries such as India, Germany, Canada, and Australia have declared different advantages under various schemes to promote the real estate industry. For instance, first-time buyers with children and an annual income of less than USD 88,000 will benefit from a subsidy of about USD 14,000 in Germany. In 2019, China government invested $1.9 billion on 13 public housing projects. Therefore, growth in the commercial and residential construction sector is supporting polymer modified bitumen market growth.
Polymer Modified Bitumen Market Segment Analysis – By Geography
Asia Pacific held the largest regional share in the polymer modified bitumen market in 2020 up to 30%, due to the booming construction industry and increased public infrastructure projects in the region. For instance, India allocated INR 21,453.42 of the INR 71,000 crore budget allocation to the Ministry of Highways for work under the road division in its 2018 budget. This includes expenditure on the construction of national highways, including projects relating to expressways, two-lane highways under the National Development Project for Highways, six-lane crowded sections of the Golden Quadrilateral, A special project for the construction of road connectivity in the affected areas of Naxal, the construction of roads between Vijayawada and Ranchi, and the provision of last-mile road. In addition In February 2018, the Philippines and Japan signed a loan of 9.4 billion YEN to build the third phase of a road project in Bulacan. Therefore, these projects are influencing polymer modified bitumen market growth in the region.
Polymer Modified Bitumen Market Drivers
Increasing Road Construction and Repair Activities
Rapid industrialization in emerging economics and increasing road construction, repair, and maintenance activities are the key factors driving the market growth. Polymer modified bitumen such as thermoplastic elastomer, asphalt modifiers, and plastomers are extensively used in road and building construction, owning to improved properties such as high strength, better elasticity, and low maintenance. In 2019, India announced to take four-lane bridge construction work, including approaches over the Brahmaputra River between Dhubri on the North Bank in Assam and Phulbari on the South Bank in Meghalaya, with loan support from the Japan International Cooperation Agency (JICA). The construction period is 7 years and 9 months, and the completion date is predicted to be 2026-27. Bangladesh through India-Japan Development Cooperation is planning to enhance the connectivity by way of four-lane road, reconstruction of bridges on the Ramgarh to Baraiyarhat stretch, and by constructing the Jamuna Railway Bridge over the Januma River. In addition, China has launched One Belt, One Road for forging infrastructure and facilities networks by developing efficient transport routes connecting major seaports along the belt and roads. According to the report represented in the annual session of the National People’s Congress in March 2019, CNY 1.8 trillion of investment was planned for road construction and waterways projects in China. In addition, According to the India Brand Equity Foundation (IBEF), India aims to spend US$ 1.4 trillion on infrastructure over the next five years. Moreover, the government has launched projects in India, such as ‘100 smart cities’ and ‘Housing for All by 2022,’ which are expected to drive the Indian residential construction market over the forecast period, eventually boosting polymer modified bitumen market growth.
Polymer Modified Bitumen Market Challenges
The Fluctuating Raw Material cost
Price and availability of raw materials are the major factors that affect the price of the end products. The major challenge for the global polymer modified bitumen market is the oscillating price trends of raw materials, which are fluctuating due to volatile energy prices. According to, BP Statistical Review of World Energy, in the recent year there has been an increase in the price volatility of crude oil, such as the crude oil price decreased from $98.95 in 2014 to $52.39 in 2015 and increased from $43.73 in 2016 to $71.31 in 2018. Fluctuations in crude oil prices impact the cost of bitumen as it is produced by removing the lighter fractions such as liquid petroleum gas, petrol, and diesel from heavy crude oil during the refining process. Therefore, due to changes in crude oil and petroleum prices, fluctuations in the prices of raw materials may hamper the market growth in the forthcoming evaluation period.
Polymer Modified Bitumen Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Polymer Modified Bitumen market. Major players in the Polymer Modified Bitumen market are Total Oil India Pvt. Ltd., Benzene International Pte Ltd, Lagan Asphalt Group, Nynas AB, Royal Dutch Shell PLC, ExxonMobil, Gazprom NEFT and Sika AG, among others.
Key Takeaways
Asia Pacific dominates the polymer modified bitumen market, owing to increased manufacturing & construction activities and various government initiatives such as 100 smart cities and Housing for all by 2022 in the region.
According to International Trade Administration (ITA), the construction value of China in 2018 was USD 893.58 and USD 968.06 in 2019. Also, the Chinese construction industry is forecast to grow at an annual average of 5% in real terms between 2019 and 2023. This growth is expected to influence polymer modified bitumen market.
However, COVID-19 is having a massive impact on construction projects, due to lockdown, and regulation on social distancing has become the major factor that slowed down the growth of construction in the region. These factors are constraining the growth of the market.
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