Although United States’ cement consumption is expected to decline to 75Mt in 2009, compared to near record 2005 levels of 128Mt, a recent PCA Economic Research 25-year forecast cites market factors that could propel domestic powder demand upwards of 192Mt by 2035.
One of the more startling aspects of this outlook is that consumption trends appear to spell trouble, with both short- and long-term production shortfalls expected. Climate change legislation, plant emissions regulations, and sustained high oil prices are likely to result in the elimination of wet process cement production, which accounts for approximately 15 percent of all U.S. power produced, and could force the closure of a significant portion of domestic mill capacity. Add to that the likely growth in cement usage even in the next five years (consumption levels are expected to his 122 million metric tons by 2015), the potential for a 100 million-metric ton domestic supply gap may materialize by 2035. Large investments, in either new import terminals or new domestic capacity, will be required to close the supply gap.
PCA’s 25-year, long-term outlook shows an aging population, structural changes in world demand for oil and raw commodities, climate impacts on energy prices, and the potential for large federal deficits accrued due to rising costs of entitlement programs will create modest gains in per capita cement consumption. State and local government financial stresses and the potential difficulties in funding public construction projects will also be a factor in future powder consumption. However, new opportunities could emerge for cement as a result of a sustained and large improvement in concrete pavement costs against asphalt alternatives; government policies aimed at energy independence; and, green-building priorities.