Availability of cement, the key, binding ingredient used in
concrete, has been limited in some regions of the U.S. since
the spring. What initially crept up in Florida and the southeastern
U.S. has expanded, but remains a regional problem.
Fueled by residential construction, cement demand in most
states remains strong. In addition, many producers currently
hold very lean inventories. These factors, coupled with the
curtailment in imported cement, have raised the likelihood
of shortages. Imported cement traditionally fills the gap
between domestic production and demand; in 2003, imported
cement represented 22.6 percent of total consumption. Regions
with the strongest demand for cement and the highest reliance
on imports remain the greatest risk of developing shortages
in the near term.
Since a June
survey by PCA Economic Research (insert link) reporting
23 states with shortage conditions or tight supplies, six
states have been added (Arizona, Delaware, Missouri, New Jersey,
Pennsylvania, and Utah). Shortage conditions in the North
Central region (Iowa, Minnesota, Nebraska, North Dakota, and
South Dakota) has eased somewhat as plant specific production
troubles have been resolved.
Wet weather along the east coast has dampened construction
activity; as a result, Alabama, Georgia, and South Carolina
have witnessed at least a temporary easing in shortage conditions.
In total, 29 states are affected by cement shortages.
Short- and Long-term
Considerations
The length and severity of the shortage depends on the region,
housing demand, and import supply.
The short-term solution is to import more cement. However,
limited seaborne vessel availability, high shipping rates,
and strong global cement demand, are hindering the industry’s
ability to achieve this solution.
Longer term, many cement companies have engaged in aggressive
modernization and expansion programs. Announced capacity increases
are projected to result in nearly 10 million tons of new capacity
by 2008 – roughly an 11 percent increase in domestic
capacity.
Zoning laws, permit activity, and regulatory roadblocks have
long been a problem for heavy industries such as cement and
will continue to limit the actual realized amount of expansion.
More information on cement shortage is available online at
the following links:
About PCA
Based in Skokie, Ill., the Portland Cement Association represents
cement companies in the United States and Canada. It conducts
market development, engineering, research, education, and
public affairs programs.
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