According to the latest data from the United States Geological Survey (USGS), cement shipments in 2017 were 95.5 million tons, up 2.4% year-on-year. At the end of 2016, the Portland Cement Association (PCA) lowered its forecast for 2017 cement consumption growth from 4.2% to 3.1%. Shipments and consumption vary, but the Portland Cement Association is moving in the right direction. Unfortunately, despite the optimism of PCA Chief Economist Ed Sullivan at the 2017 Cement Technology Conference (IEEE-PCA) about US economic growth in 2018 and 2019, it seems that the rise in demand is still not enough. President Donald Trump may have given tax breaks to major cement producers, but until his infrastructure spending actually materializes, America's construction industry is on its own.
Figure 1: US clinker production, 2013-2017 (million tonnes)
Source: USGS
Considering the United States as a whole is a little unreasonable, given its wide geographical differences. As can be seen from Figure 1, clinker production in the United States jumped from less than 70 million tons in 2013 to 76.5 million tons in 2015, declined in 2016 and rose to 76.9 million tons in 2017. Cement shipments for regular Portland and blended cement showed a similar trend, except there was no decline in 2016. Interestingly, imports of cement and clinker rose 18% to 13.6 million tons in 2016. The main importers of the United States are Canada, Greece, China and Turkey.
Figure 2: US Cement and Clinker Imports (Tons)
Source: USGS
From a cement producer's perspective, LafargeHolcim described 2017 as a "disappointing year", with overall net sales slightly down year-on-year. However, the group is still optimistic about 2018, with hopes pinned on growing employment and housing construction. HeidelbergCement acquired Essroc, a subsidiary of Italcementi, Italy, which enabled its business in the Northeast and Midwest of the United States to develop, with cement sales reaching 4.1 million tons in 2017, an increase of 2.3% over the same period last year. CRH's cement sales increased by 3%, mainly due to the increase in demand and the acquisition of Suwannee American Cement, a cement plant with a capacity of 1 million tons in Florida, which is expected to be completed after the acquisition of Ash Grove Cement. Its production capacity will be further increased.
In contrast, Italy's Buzzi Unicem, whose net sales barely grew in 2017, blamed severe hurricane weather in the first half of the year and a blizzard in December for its poor performance this year. Cemex has had a tougher year in the US, with cement sales down 6%. Cemex also blames the weather, but it can be noted that residential construction has indeed increased this year.
In this complex situation, it is no wonder that the Portland Cement Association supports, and perhaps more accurately, prompts, the President's commitment to invest $1.5 trillion in infrastructure. As usual, the Portland Cement Association predicts a boom in American industry once the latest hurdles are overcome. The final measure is inflationary pressure. The industry needs more government spending on infrastructure. However, another thing to consider is that the Trump administration is also trying to change the proportion of funding for infrastructure projects across state lines. If States end up having to pay more for these programs, they could end up being delayed or canceled. Unless cement orders start pouring in, it may be unwise to bank on infrastructure spending.
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