Pavement Marking Materials Shortage Tests Manufacturers, Contractors in 2010 Season

ATSSA reports that two key components of Acrylic Resin, propylene and acrylic monomers, are in short supply. Likewise, Liquid Epoxy Resin and Converted Epoxy Resin are also in short supply due to the loss of production of a critical raw material, phenol, which Dow Chemical Co. produces in Texas. In March Dow announced it was developing an allocation plan for phenol, and ATSSA confirmed in a survey that marking material manufacturers have been forced to reduce production of liquid epoxy resin and converted epoxy resin because of the lack of raw materials.

In addition, two components in the resin system for thermoplastic, Resins and Rosin Esters, have restricted availability. According to ATSSA, resins are derived from gum rosin or pine tree sap and while some is produced in the United States, most is imported from China and countries along the equator. ATSSA attributes the lack of availability of these resins largely to an "an incredibly poor" 2009 harvest of gum rosin along the equator and in China, in 2009. But it reports that because China has increased its road construction they are using more of the product and exporting less. And, ATSSA reports, the largest domestic manufacturer of rosin esters closed one of its three production facilities, eliminating one-third of the available production.

"Additionally, the global leader in the refining of Titanium Dioxide was forced to pull back production due to the economic downturn, resulting in current shortages for all users of this pigment," ATSSA notes, adding that the current shortages are worsened because "these raw materials have other uses, some of which have historically brought higher prices."

ATSSA reports that these and other events have resulted in a decline in production of pavement marking materials in the United States. That, in turn, has forced material producers to place many of their pavement marking customers on allocation, meaning producers are rationing material to its customers.

ATSSA reports that as raw materials become scarce, prices have gone up, and those price increases are now being felt by pavement marking contractors throughout the country as manufacturers announced a price increase in late April.

"Now as the economy has begun to improve, overall demand has increased, but full production has not returned, thereby exacerbating the shortages," ATSSA notes. "The pavement marking industry has in the past been one of the lowest priced and least profitable industries for the suppliers of resins and pigments. However, as a result of these shortages, the pavement marking industry now has to compete with other more profitable industries in order to maintain allotted supplies, resulting in higher production costs."

Raw Materials Definitions and Uses

Acrylic Resin, is the backbone or glue that holds all of the other raw materials together to make finished water-based paint, including colored traffic paint. This resin and its derivatives are used in just about every water based paint including house paints.

Rosin Esters are the main component in the resin system for Alkyd Thermoplastic. They are derived from gum rosin or pine tree sap. Rosin Esters are used in many other applications such as adhesives, inks and coatings and even food products such as chewing gum and soft drinks.

Liquid Epoxy Resin (LER) is the backbone or glue for epoxy paint. It is a petroleum derivative that is manufactured in chemical reactors by several large chemical companies around the world. LER is used in hundreds of applications in many different industries from floor coatings to waterproofing coatings.

Titanium Dioxide (Ti02) is refined from Titanium which is a mined ore. Ti02 is the pigment that makes traffic markings opaque and white and yellow markings bright. Ti02 is used in virtually every industry imaginable from coatings to medical to foods and other products like tooth paste.

Source: American Traffic Safety Services Association