July 17, 2008

Volatile asphalt prices fail to put paving plans on hold

Toronto

The cost of asphalt cement continues to rise, but it’s business as usual for pavers and roofers.

“If anything it’s been really unpredictable,” says Mike O’Connor of the Ontario Hot Mix Producers Association. “It went up in the spring and then in May dropped. Then back up in June.”

He said given the volatile swings that there seems to be supply-and-demand factors working into the prices beyond simply the obvious effect of rising crude oil prices.

“There may be shortages in places or other factors driving prices,” he says.

Meanwhile, he says, the cost of asphalt cement has not prompted buyers to scale back.

“The Ministry of Transportation Ontario has a record budget out there and the City of Toronto is also going strong,” he says.

The MTO asphalt cement index for stood at $285.50 a tonne in June 2005 before steadily rising to $433.80 in June 2006, $505.45 in June 2007 and $691.53 in June this year. It jumped from December’s posted price of $435 a tonne — traditionally low due to depressed demand — to $676.47 in April.

—IAN HARVEY

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