DCN ARCHIVES

May 3, 2007

Asphalt at $508

The Ministry of Transportation’s (MTO) April Asphalt Cement Price Index (API) shows asphalt cement prices cresting $500 a tonne as of May 1.

After peaking last summer at more than $550, prices moderated, settling at a little over $400 in November. MTO doesn’t update the index during winter months, so the new price of $508.60 is the first indicator of actual asphalt cement prices in 2007.

“I think all of the factors that drove the price well beyond $550 last year are still there,” says Mike O’Connor, executive director of The Ontario Hot Mix Producers Association (OHMPA). “But I also think the market has settled into a situation where — barring a few hiccups — we feel confident that the $500 range is sustainable.”

O’Connor notes there’s bright side to the higher price.

“Asphalt cement has always been seen as a waste product; the bottom of the refinery barrel,” he says. “At this price point, the refineries see the product as something worth producing, rather than refining the oil into something more valuable. We’re not expecting to see the supply shortages we were experiencing last year.”

O’Connor says the higher price will also mean contractors should be encouraged to concentrate on using recycled hot mix asphalt to help reduce costs.

— KENTER

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