When the gasoline prices began to rise, it was no great surprise that crude oil products, like asphalt shingles, soon followed suit. In fact, early in 2008 the price of asphalt was rising at a rate of 7 to 10 percent per month. But what happened when the gas prices started to moderate? We began asking, “When can we expect prices of our most economical and widely used roofing material to come back in line?”
Some research into our question has revealed that the roofing industry is facing challenges that may result in some radical changes that will likely be here to stay. The convergence of an erratic oil market and our changing world economy, as well as natural disasters, conflict in the middle east, and war have wildly affected the price and availability of a commodity we have come to take for granted. This has made accurately estimating roofing costs a big challenge!
Asphalt is made by mixing crushed stone or gravel with bitumen, a heavy tar-like substance that is left over after gasoline, kerosene, jet fuel and diesel are refined out of crude oil. Bitumen is also known as asphalt oil. A shortage of asphalt oil began to emerge with a booming construction industry and a drop in volume from the refineries that had to install new equipment to produce low-sulfur diesel fuel that was mandated by the federal government. The production of low-sulfur diesel results in significantly less asphalt oil.
Additional research and development efforts continue to find better ways to produce even more gasoline from each barrel of oil…great for increasing the supplies of refined petroleum products, but still diminishing the supplies of the dregs normally used to produce asphalt and roofing shingles.
As of August 1st 2008 asphalt increased by over 70% for the 2008 season. There is no way of predicting what will happen in 2009. Some folks in the asphalt market speculate that asphalt may drop a slight amount from where it is now during the spring, then steadily rise throughout the summer.
With increases in the installed cost of asphalt shingles, manufactures of other steep slope roofing systems are seeing new opportunities for new product lines. Even though prices for slate, metal and other composite roofing materials have been rising as well, it is felt their pricing will be much more predictable. No doubt, though, asphalt shingle roofing will continue to offer a very competitive value proposition when all things, including looks and upfront costs, are considered.
Our Providence Team has made a commitment to our ongoing education regarding new products, trends and processes that have impact on the residential building industry.
http://www.providencecustomhomes.com/
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