Pavement marking contractors having a tough time getting paint, epoxy, and thermoplastic materials - and paying more for them -- as a result of a worldwide shortage of raw materials will likely be facing that situation for the remainder of 2010 and possibly beyond, according to a recent report and survey by the American Traffic Safety Services Association (ATSSA).

According to the Report on Raw Materials Shortages in the U.S. Pavement Markings Industry, a shortage of raw materials producers need has resulted from the limited availability of some resins and rosins that are used as binders in some pavement marking materials. In addition there is a shortage of Titanium Dioxide, a white pigment with a high coefficient of reflection that is used to produce white and yellow marking materials.

"…All of the producers that we surveyed anticipated that raw materials prices would be higher in the future when compared to a year ago, even if supplies normalized or increased, due in part to increased demand, including on an international basis," the report noted. "In looking at the effect of raw material cost increases on finished product prices in the marketplace, virtually every manufacturer anticipated an increase when compared to a year ago."

ATSSA reports that because of the shortages every pavement marking manufacturer was producing material below their capacity.

• 78% of manufacturers reported that they were having difficulty obtaining resins/binders to produce pavement marking materials
• 56% reported difficulty in obtaining Titanium Dioxide. "Of those that reported little or no difficulty in obtaining TiO2, it was generally due to the fact that they had either stockpiled product in anticipation of a shortage or had located product in the marketplace at much higher costs than historically had been the case."

As a result of their inability to obtain the raw materials, markings manufacturers reported their production was down significantly relative to normal production at this time of year. Paint producers reported production down an average of 50%, thermoplastic producers reported production down an average of 43%, and epoxy producers reported production down an average of 78%.

ATSSA says there is "a significant concern" that as inventories continue to decline safety on roadways could be jeopardized, particularly for overlay projects that require new centerline, edge line and lane markings. "Indeed this could adversely affect project completion," ATSSA reports.

"The further result of reduced production is that roadway marking contractors who have contractual obligations as subcontractors to general contractors or as direct contractors to state and local governments to mark roadways may very well be unable to deliver their product within the timeframe and cost structure of the original project plan."

In addition, 100% of producers also reported their timeframe for delivery of pavement marking products has increased when compared with the average of the last three years.

"Although it was not a formal question in the survey, anecdotally, almost all manufacturers indicated that the timeframes they quoted were for existing customers, and that they were not able to serve new customers at this time," ATSSA notes.

Development of Shortages
The manufacture of paint, epoxy and thermoplastic includes raw materials that enhance color, brightness, and binding in the finished product. While the materials are not the same for each product they include Acrylic Resin, Rosin Esters, Liquid Epoxy Resin and Titanium Dioxide (Ti02)2.

ATSSA reports that what it terms "a perfect storm" of events has contributed to the shortage, including the economic downturn that has forced chemical companies to cut back on production to stay profitable.