Texas Industries has announced that it was now beginning to achieve cement price increases in both of its major markets, Texas and California. In Texas it confirmed that January 2007’s $10 per ton price increase had largely held in North Texas. Although January’s $10 per ton increase in Central Texas and $15 per ton increase in South Texas (Houston) did not hold, it was trying again in both regions and expected to get at least part of the increase during the summer (as reported by analysts at JP Morgan).
Texas Industries reported that the excess of imports in the Gulf of Mexico earlier in 2007 had now disappeared. In Southern California, Texas Industries reported that it had obtained a “significant proportion” of the $10 per ton price increase that it had implemented in June 2007. It reported that although cement shipments were currently around 10% lower than a year ago, imports which accounted for around 25% of supplies, are down around 40%.
Due to the backlog of orders, Texas Industries does not expect to see a significant benefit from these price increases on its achieved prices for several months. This is particularly the case in Texas, where the weather
has been unusually wet during the last six months.
Encouragingly, Texas Industries reported that energy costs in its cement business, 35-40% of costs of good sold, were currently flat on a year ago. Texas Industries also announced that it had implemented a $4-5
per cubic yard (5-6%) mid-year price increase in its ready-mixed concrete business, conlude JP Morgan analysts.