Cement tightness will continue, US

Cement tightness will continue, US
20 December 2005

US cement makers have reportedly announced 10-15 per cent price increases for January atop a 13 per cent increase in the past 12 months. ‘They probably will stick,’ says Ken Simonson, chief economist of the Associated General Contractors of America, because the Portland Cement Association believes cement shortages will continue in 2006.

Ed Sullivan, chief economist of the Portland Cement Association, says cement supply was tight in 32 states during 2005 because overall demand increased by 5.2 per cent over 2004 levels. The tightness occurred even though the US imported 33Mt of cement in 2005, roughly 27 per cent of total demand.

More offshore supply was stymied partly by 55 per cent import duties on Mexican cement. Residential construction is expected to decline due to raising mortgage rates in 2006, says Sullivan at a recent Outlook for Construction Materials conference.

However, increases in commercial construction and public works construction will more than offset any residential slowdown and provide a net cement consumption gain of 3.7 per cent in 2006, says Sullivan. His forecast projects 2006 imports to reach 35Mt, or 28 per cent of the total use of 124Mt – but he also sees tightness continuing in at least 15 states for some months ahead. "What are needed are more cement plants in the US and modernised import terminals that would expand throughput capacity," says Simonson.

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