State DOTs Finding Lowest August Asphalt Material Prices in Nine Years, Since 2007

AASHTO Journal, 12 August 2016

Illustrating that this is one of the best times in the past decade to invest in transportation projects, state departments of transportation across the country are reporting the lowest August prices for asphalt and related pavement materials since 2007.

dollarpump.jpgThat makes the cost state DOTs are paying for asphalt – one of their most widely used materials in building or maintaining roadway infrastructure – lower now than during the weakest times for the economy during the 2008-09 recession.

An Alabama DOT price index lists its performance grade asphalt this month at $1.43 a gallon, up from May’s low of $1.34 but still the lowest August price since 2007. Last year at this time, that DOT was paying $1.95 for a gallon of PG asphalt.

The neighboring Georgia DOT uses a per-ton price index that shows the same trend for asphalt cement. Its price is $348 a ton for August, down from $470 a year ago and also the lowest for this month since 2007. By comparison, during the 2009 recession year Georgia’s asphalt cement price was $389.

Those are not isolated examples, but are part of a national trend that also shows up in asphalt price lists kept by DOTs from New Jersey to Arizona.

For instance, the Ohio DOT maintains a monthly dollar-per-ton index for any binder grade of asphalt going back to 2009, and includes a chart that tracks the price trend. It shows that asphalt prices have fallen nearly steadily since late 2014, when they topped $587 a ton that October. The Ohio index shows this month’s price at $303.33, the lowest for any single month in that seven-year listing.

“Since August is one of the busiest months for roadway infrastructure projects across the United States, the fact that DOTs are seeing the lowest asphalt prices for this month since 2007 means they can stretch their project budgets to cover more work,” said Bud Wright, executive director of the American Association of State Highway and Transportation Officials.

“However,” Wright said, “there is a huge backlog of projects that would improve mobility but need funding. Lawmakers could be getting a much bigger return now, when key materials costs are low, by investing in projects that build economic strength for decades to come.”

The asphalt price trend reflects the low world price of the petroleum from which it is made, which is also seen in this year’s continued low prices for oil-derived motor vehicle fuels.

The U.S. Energy Information Administration said its Aug. 8 weekly survey of fueling stations showed a national average pump price for gasoline of $2.15 a gallon, down 48 cents from a year earlier. The average diesel price that day was about $2.32, down 30 cents from the same point in 2015.

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