IMO 2020: Risks and opportunities to the asphalt markets

Author Argus

In this second of two parts, we asked experts to share their thoughts on the potential risks and opportunities to the asphalt market in the run-up to the IMO's January 1, 2020 implementation date.

Last week, we released the first of a two-part interview series with asphalt industry experts about the upcoming IMO 2020 implementation, and how it might affect the market. We heard from suppliers, industry groups, and more about how they are preparing for the impending cap on sulphur in marine fuels. 

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Across the refining industry, companies are preparing for the January 1, 2020, implementation of the International Maritime Organization’s marine fuel sulphur cap. Producers and suppliers from the top to the bottom of the barrel expect to see some affect.

We spoke with asphalt industry experts to get their thoughts on the risks and opportunities present in the market as we approach 2020. 

Allen Smith, Principal Consultant, Asphalt Sourcing Alliance LLC: I think the risk and opportunities over the next 12 months will incorporate cost, availability and quality. And if you guess wrong, it could be costly. If you guess right, you could be very happy. 

Bill Lee, Terminal Manager, Century Asphalt: I'm not sure there's a lot of risks other than people gotta be aware that there may be changes to the actual quality or the makeup of the asphalt. I think the opportunities are, again, there's gonna be price pressure that's gonna reduce the price of the asphalt. And there may be a small increase in the short-term in the supply of asphalt, which is beneficial for the end user. 

Jim Musselman, Asphalt Performance Manager, CRH Americas Materials: The risks are going to be that we're using crude sources potentially that we haven't used in quite a while. We might have some performance issues. The opportunities, at least in the short term, are gonna be probably a bigger supply which could lead to, you know, reduced costs and, you know, we could probably build more roads for the same amount of money. So it's good not only for contractors but also for public agencies. 

Jay Hansen, Executive Vice President, National Asphalt Pavement Association (NAPA):  Well, the risks and opportunities for the asphalt market are great. The biggest reason is we have a reauthorization of the highway program pending in the Congress. They plan to move a bill as early as this spring and try to get it to the House and Senate floors this summer. That legislation funds about 50% of the publicly-funded highway market for our industry. So it drives the asphalt pavement market. 

We hope this provided more insight into what IMO 2020 may mean for your business. To learn more about Argus’ global asphalt market coverage, visit our blog. 

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