As cement supplies tighten in some areas of the United States, Mexico would seem to be the most logical source for additional imports, but there is a prohibitively high anti-dumping duty on cement from that country, which NAHB has opposed. Canada already provides about 25% of the cement imported into the U.S.
“This is likely to continue to be a problem, at least until late this year” said NAHB economist Michael Carliner. “The overheated Chinese economy is due for a major correction, but that hasn’t started yet, and countries like Japan that have been in recession are starting to grow and demand more cement.”
Cement, the key ingredient in concrete, is also a key ingredient in the nation’s housing, being used for everything from foundations, driveways and sidewalks to, in some cases, even the full construction of a home.
NAHB, through its newly formed Concrete Home Building Council, is monitoring the current situation closely to keep home builders informed and to identify ways in which the association can help alleviate the problem.
According to the Portland Cement Association (PCA) in Skokie, IL, the combination of stronger economic growth and favorable winter weather produced a double-digit increase in domestic demand for cement during last year’s fourth quarter. Cement producers typically overproduce during the winter to build inventories for the spring, but unusually high demand during the winter months prevented them from doing so this year.
Florida is the only market to date that has reported widespread delays in concrete deliveries, although there are some indications that similar problems could be developing in other areas. The Florida market is particularly vulnerable to these shortages because it imports about 40% of its cement, compared with a nationwide average of about 22%.
According to PCA, any supply problems that do occur will be regional, with the length and severity of the shortage depending on the cement companies serving that region.
As the population grows, the needs for housing, infrastructure and nonresidential construction will continue to increase the demand for cement. With domestic producers operating at close to capacity, the short-term solution is to import more cement.
But over the longer term, cement companies have announced plans to expand manufacturing capacity by more than 10 million tons by 2008, a roughly 11% increase, according to Ed Sullivan, PCA’s chief economist, and that promises a better balance between supply and demand in the future.
For additional information from PCA’s Web site, click here, or contact Ed Sullivan at 847-972-9006. At NAHB, e-mail Dawn Faull, or call her at 800-368-5242 x8362.
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