Liquid
asphalt cement is one of the world’s oldest engineering materials. More
than 100 million tons of asphalt are consumed worldwide each year. In
the United States, approximately 90 percent of liquid asphalt cement is
used for road paving. Sales of liquid asphalt paving products average
nearly 30 million tons per year in the United States.
Liquid asphalt cement is a by-product of the crude oil
distillation process. Liquid asphalt cement production represents only
a small portion of the total crude oil refining process. It typically
is sold by the refinery either directly into the wholesale and retail
liquid asphalt cement markets or to a liquid asphalt cement marketer.
The asphalt industry in the United States is characterized by a high
degree of seasonality. Refineries produce liquid asphalt cement year
round, but the peak asphalt demand season is during the warm weather
months when most of the road construction activity in the United States
takes place. As a result, liquid asphalt cement prices can vary
dramatically from the winter to summer months. Liquid asphalt cement
marketers and finished asphalt product producers with access to
extensive storage capacity such as that offered by Blueknight Energy
Partners have the advantage of being able to purchase supply from
refineries at low prices in the low demand winter months and then sell
finished asphalt products at higher prices in the peak summer demand
season.