The US Portland Cement Association (PCA) in the US has issued its latest update on new US cement capacity which indicates that the planned commencement of a new phase in the US cement capacity cycle has been halted and two planned new plants being postponed indefinitely. They were both greenfield plants. Houston American Cement had planned to open a new 810,000tpa plant in Perry, Georgia in mid-2010 and Sumter Cement Company had planned to open a 1.35Mta plant in Center Hill, Florida early in 2011.
The PCA also reports that capacity closures totaling 4,841,000t have been announced in recent months. These include St Marys Cement in Dixon Illinois (-580,000t); Buzzi Unicem Independence plant in Kansas (-292,000t); and Buzzi Unicem’s Oglesby plant in Illinois (-534,000t). Cemex is also due to close its Brooksville Florida plant (-1,132,000t) and Texas Industries its Midlothian Texas plant (985,000t). With new plants still coming on-stream including the massive 4Mta Ste Genevieve plant of Holcim, an annual capacity increase of just 5Mta is expected.
Analysts at JP Morgan suggest that capacity utilisation could decline to around 80 per cent in 2010. It estimates that the US cement industry will import around 12Mt of cement this year, of which around 8Mt is structural. Therefore as demand declines, imports could fall by around a further 4Mt. However, with estimates that cement demand could decline by around 10Mt in 2009, which together with 5.1Mt net of new capacity, and the opportunity to reduce imports by around 4Mt suggests that capacity utilisation in the US cement industry could decline to around 89 per cent in 2009 and it could fall to around 80 per cent in 2010, with demand falling by around another 3Mt and 6Mt of new capacity scheduled to open – JP Morgan analysts conclude.