As far as we can tell, there is a pretty significant shortage of highway lane paint inventories that is affecting contractors in every state and quite a few state and local transportation departments, said Brian Turmail, spokesman for the Associated General Contractors of America (AGC).
The highway paint shortages came from tight supplies of MMA and TiO2, key components of virtually all acrylic paints, according to the AGC. Acrylic paints, in turn, represent about 80% of the paints used on US roads.
The US MMA market is saturated in forces majeures (FM) and allocations, and supplies could remain tight through June or even into 2011, market participants said.
Major MMA producers Lucite and Dow Chemical have both declared force majeure, buyers said. Evonik had delays because it was receiving so many calls from Lucite and Dow customers.
This is an industry-wide issue, and it is due to a combination of strong demand and planned and unplanned outages across many industry producers globally, Dow spokeswoman Rebecca Bentley said.
North American producers of titanium dioxide (TiO2) paint pigment have achieved two price hikes totalling 5-10 cents/lb ($110-220/tonne, 90-180/tonne) since January on tightening supply and stronger demand after a weak 2009 prompted inventory depletions and capacity reductions.
Two more initiatives totalling 13 cents/lb were on the negotiating table, sources said. TiO2 production was running at full rates, but delivery lead times have stretched from two weeks to as long as two months, buyers and sellers said.
Several paint suppliers have distributed roughly 50% less paint than in typical months as a result of tight raw materials, Turmail said, but added that the numbers were improving.
Highway paint manufacturers such as Ennis Safety Systems received far fewer shipments on the components they need to make highway paint, forcing them to declare force majeure and deliver approximately 50% of the paint they were contracted to provide to state and local DOTs, Turmail said.
Ennis Safety Systems was not immediately available for comment.
We expect shortages to last for another six to eight weeks, which, alas, corresponds to the peak highway construction season for much of the country, Turmail said.
The highway paint shortage was not limited to just one region, he said.
We talked to a number of highway paint suppliers, other contractors and state departments of transportation (DOT) and quickly learned that there was a national highway paint shortage, Turmail said. We ve also seen reports from Canada and the UK that there are highway paint shortages there as well.
So far, the US has not had to cancel any projects, but delays are inevitable, according to Turmail.
Meanwhile, we re meeting with other state DOTs, and have been talking with the Federal Highway Administration to make sure other solutions such as temporarily laying lane tape or using different types of temporary paint are in place so needed road construction projects don t come to a halt, Turmail added.
North American airport contractor Hi-Lite Markings warned its customers about the paint shortage this week, and encouraged alternative types of paints in the near term.
The AGC said it had not yet been able to detect any signs of paint shortages outside of road construction.
Our best guess is that there are larger inventories of this kind of paint, and the demand isn t as strong simply because there s still not a lot of office, retail or multi-family housing construction out there to drive demand for wall and ceiling paint, Turmail said.
($1 = 0.82)
