Reflecting on our Roads

Whether we’re dealing with the results of Canada’s Economic Action Plan, or the U.S. Recovery Plan….Anybody who’s had to use roadways during the hot and dusty Summer of 2010 isn’t about to soon forget the ravaged pavement surfaces and miserable traffic congestion created by all the government sponsored stimulus projects. This is because most of them are are still clogging up our roads in their ongoing efforts to presumably continue stimulating the economy, as well as testing our personal patience with their lengthy reparations.

Ironically, even though these private and public works projects were designed to keep key sectors of the economy well primed with cash, and the economy rolling along, during this time most North-Americans had no idea that the entire Industry almost came to a screeching halt due to a critical shortage in the supply of road and highway paint…A shortage that not only threatened to block the completion of those endless road projects, but which also hinted at some even bigger industrial concerns further up the supply chain. This supply issue tips us off to an even bigger story that goes far beyond the possibility of a cash grab by suppliers and contractors during a public-backed construction boom…and actually points to some fascinating possibilities in the Future.

For want of some roadpaint…

It bears mentioning, that this short-term paint supply dilemma wasn’t just dictating how quickly some roads could be painted and re-opened, but it also posed a subtle risk to the North American economy in itself!

In brief…Any widespread failures to apply the critical lane markings, and thus complete government backed road and infrastructure projects, could have stalled things entirely, by setting off a disastrous domino-effect of unpaid contractors and suppliers. This would have raised the risk of further market volatility, as capital was squeezed across entire industrial sectors, causing consumer confidence to falter, and possibly even credit freeze up again…Phew!

Luckily the paint supply problem has loosened up significantly since then, and after the anticipated hikes in base materials costs forced a subsequent rise in the price of final products, everyone is currently getting their inventories back up to snuff, without any need for more business drama…But what was really behind this narrowly averted and virtually unknown crisis?

First…Let’s present some facts that led to this supply Failure

Earlier this Summer, Highway & Transport Departments everywhere started scrambling to maintain supply in order to stave off drastic measures when news broke that DOW Chemicals, would be unable to meet it’s supply projections after having slowed down production at the outset of the recent Recession. It turns out that other key suppliers of road paint had also slowed production during their own cost cutting measures. Astoundingly, all of these key suppliers had somehow been taken off-guard by the deluge of government sponsored roadwork announcements over the past couple of years…Hmnnn.

Double Trouble

This supply problem was actually double-folded because the two major components of the acrylic road paint — methyl methacrylate (MMA) which is used in the paint resin, and Titanium Dioxide (TiO2) which is the reflective material — were both in very short supply, for the abovementioned reasons. Though it seems that there were also some scheduled outages for mechanical maintenance as well at certain chemical plants in Texas that provide the resin for road paints, which also served to substantiate the reasonings for such widescale supply issues in North America.

Most interesting in all of this, is that there were also numerous mentions in press releases of the fact that China, which supplies the world with only about 15% of it’s TiO2, had stopped ALL exports of this critical material, after claiming that it had domestic supply/demand issues of it’s own to contend with.

As such, the sources of this shortfall are actually a mixture of local and global economics, complex chemistry, production disruptions, and some international trade intrigue thrown in for good measure. The results of which was a steeply rationed supply of paint for many customers, delays in new orders, and of course a significant rise prices over the course of the Summer—which will most likely remain in place well into the Future.

So what does that mean, and why should we care…So long as we can all see the edges of the highway at night, know which side of the road to stay on, and nobody is unsure about where to stop at an intersection?

To answer that loaded question, we’ll need to look at just how pervasive TiO2 really is in our current Society, by CLICKING HERE….(COMING SOON-SORRY)

In the meantime, you might be surprised to see all the GOOD THINGS that can come from the frustrations of Road Construction

SOURCES

http://enr.construction.com/products/materials/2010/0526-HighwayPaint-1.asp

http://www.thestar.com/news/gta/article/815690–road-paint-chemical-in-short-supply

http://www.joconl.com/article/id39125

http://money.cnn.com/2010/05/26/news/companies/road_striping/index.htm