Market Overview The bitumen market was estimated at over 100 million metric ton in 2020, and the market is projected to register a CAGR of less than 4% during the forecast period (2021-2026). The market was negatively impacted by COVID-19 in 2020. According to the International Monetary Fund (IMF) projections, the global GDP growth was projected to be -4.9% in 2020. However, in 2021, global growth is projected at 5.4%. Moreover, the performance of the construction sector is projected to be affected moderately due to the impact on the liquidity of money as a result of affected income of a relatively larger section of the society, which is expected to affect the market studied. Declining investments in the road and building construction segment led to a decrease in the consumption of bitumen in applications like road construction, waterproofing of building roof and basement, sealant, filler, and adhesive, which in turn, negatively impacted the bitumen market. Over the short term, increasing road construction and repair activities and increasing demand for bitumen as filler, adhesive, and sealant from the commercial and domestic building construction sectors are expected to drive the bitumen market’s growth. For instance, several major infrastructure construction investments are also noticed in Middle Eastern countries, where about 1,069 road projects were underway as of February 2020, which is likely to enhance the market demand for road construction and repair activities. Increasing environmental concerns regarding bitumen and unfavorable conditions arising due to the impact of COVID-19 are hindering the market's growth. R&D on bitumen processing to improve road infrastructure and development of high-performance bitumen products like shell cariphalte, shell mexphalte, and others are likely to create opportunities for the market in the coming years. The Asia-Pacific region is expected to dominate the market, and it is also likely to witness the highest CAGR during the forecast period. Robust growth in construction activities in the Asia-Pacific region is also expected to drive the market growth in the forecast period. Massive investments are required that help in the modernization and maintenance of these systems.In 2019, the US new highway and street construction sector was valued at about USD 97.56 billion, and it is estimated to reach about USD 107.74 billion by 2024, with a CAGR of about 2%, which is likely to stimulate the demand in the bitumen market.
The Asia-Pacific region dominated the global market share. In Asia-Pacific, China is the largest economy, and the growth in the country remains high, but it is gradually diminishing as the population is aging and the economy is rebalancing from investment to consumption, manufacturing to services, and external to internal demand.
While the residential sector is enjoying a strong recovery, the results for the office, retail, and logistics sectors have been mixed. The office markets in Tier 1 cities (including Beijing, Shanghai, and Shenzhen) generally remain healthy and continue to enjoy strong demand for office space, driven by the information technology (IT) and finance sectors.
Besides this, significant development of rail and road infrastructure by the Chinese government to withstand the growing industrial and service sectors has resulted in the significant growth of the Chinese construction industry in recent years. As the construction industry is dominated by state-owned enterprises, increased government spending is boosting the industry in the country.
Meanwhile in Guizhou Province, China Gezhouba Group Road & Bridge has won a package of works for the construction of two highway projects. The firm is expected to work on the new highway connecting Nayong with Qinglong as well as the highway between Liuzhi and Anlong. The two projects are worth a total of around USD 8.68 billion. China Gezhouba Group Road & Bridge’s share of the contracts is worth an estimated USD1.27 billion.
Moreover, to contain the growing greenhouse gas predicaments in China’s major cities, the country’s national climate commitment calls for 50% of all new buildings constructed by 2020 to be certified as green buildings, while its 13th Five-year Plan prioritizes building efficiency. Following these commitments, the country’s green building sector is expected to increase from 5% to 28% by 2030, representing a USD 12.9 trillion investment opportunity. This is expected to propel the market during the forecast period.
India has the second-largest road network in the world in terms of length covered with a value of 5.89 million kilometers, and the Indian roads sector is likely to account for 18% of the capital expenditure over FY 2019-25, which in turn, stimulates the demand for bitumen.
In 2020, the total length of national highways in India was around 1,34,400 kilometers, and the aim is to add another 60,000 kilometers by 2025, which is likely to stimulate the demand in the bitumen market in the country.The major upcoming projects in the country that are likely to increase the demand for bitumen are the Delhi-Mumbai Industrial Corridor, Bharatmala Project, Gujarat International Finance Tec-City (GIFT), Smart City Kochi, and Navi Mumbai International Airport.
In 2020, the government launched the work for the strategic 14.15 kilometers-long Zojila tunnel, which will provide all-year connectivity between Srinagar valley and Leh. Many national highway projects and road projects under Pradhan Mantri Gram Sadak Yojana have been started by the Indian government, like the National Highway project of Kerala with a value of USD 2.67 billion, etc., which is expected to stimulate the demand for bitumen.Due to all such factors, the market for bitumen in the region is expected to have rapid growth during the forecast period.