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U.S. Cement Consumption to Remain at Record Levels
In its forecast report earlier this summer, the Portland Cement Association (PCA) predicted that U.S. consumption of cement will climb by 5% this year, hitting a third consecutive annual record and heading for a 3.3% increase in 2006.
The association revised its projections upward as it became apparent that housing activity this year would exceed expectations, with starts totaling 1.64-1.65 million compared to its earlier forecast of 1.54 million, a 2%-2.5% gain.
“At 19 metric tons per new single-family home,” the report says, “this upward adjustment in starts translates into a potential addition of 2 million metric tons to 2005 cement demand over previously projected residential cement consumption.”
Adding to demand pressures in 2005 is nonresidential construction activity, which is expected to increase in the range of 7% following three years of large declines.
Although slower growth rates are anticipated for housing production in the 2007-2009 period, the report says, Portland cement consumption is expected to reach 134 million metric tons by 2009, up from almost 126 million tons this year.
“If such strong demand conditions persist,” the report says, “the challenges of supplying the market will remain in place. According to the PCA baseline outlook, domestic capacity will run full out throughout the forecast horizon.
“Little opportunity will materialize to build inventory levels, estimated at six days supply at the end of 2004. The burden of supplying expected market growth will be placed on achieving significant increases in imports.”
Annual import levels are expected to top out at a record 35 million metric tons during 2005-2007, but shipping and the availability of the material from foreign sources will remain hurdles to reaching that amount, according to the PCA.
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