Displaying items by tag: PCA
Update on California, July 2022
06 July 2022CalPortland completed its acquisition of the Redding cement plant from Martin Marietta this week. As previously announced the transaction involved the integrated cement plant in northern California, related cement terminals and 14 ready mixed concrete (RMC) plants also in the state. However, CalPortland’s parent company Japan-based Taiheiyo Cement revealed this time round that it is considering buying the Tehachapi cement plant from Martin Marietta too. It says it has some sort of preferential purchase agreement in place, although a final decision is yet to be made.
If CalPortland and Taiheiyo Cement do end up buying the Tehachapi plant as well as Redding then it will mark a fairly quick turnaround of owners. HeidelbergCement subsidiary Lehigh Hanson announced that it was selling up assets in its US West region to Martin Marietta for US$2.3bn in May 2021. The deal was completed by October 2021. Then, CalPortland said it was buying the Redding plant in March 2022. From an outside perspective it was not clear what Martin Marietta might have had planned for its new assets. Over three quarters of Martin Marietta’s revenue in 2021 came from its Aggregates and RMC products. However, it is also a prominent regional US cement producer with two plants in Texas and two plants in California, along with associated terminals. So, building up its cement business in California didn’t seem unfeasible. Now, as can be seen, it is likely to be sticking to its primary focus of aggregates and RMC. It is also worth noting that California has some of the stricter CO2 reduction policies in the US with a 40% reduction target for 2030 (compared to 1990 levels) and a local emissions trading scheme that started in 2013.
Looking at the local cement production base in California, the latest development with the former Lehigh Hanson plants shows the changing situation since the subsidiary of HeidelbergCement left the region. Beforehand, Cemex, Lehigh Hanson and CalPortland each had a similar clinker production capacity. Then, Martin Marietta took the lead and now CalPortland looks set to become the frontrunner if it buys Tehachapi. With the Redding deal completed it now operates three integrated cement plants in California and one in Arizona. Alongside this it runs 15 terminals in Alaska, Arizona, California, Nevada, Oregon and Washington – and – two terminals in Alberta and British Colombia in Canada. The Redding plant is also a distinctive addition to its portfolio as it is further north than the other clinker units.
United States Geological Survey (USGS) data shows that cement shipments to California grew by 5% from 10.05Mt in 2019 to 10.57Mt in 2021. So far in 2022, shipments to the state rose by 3.4% year-on-year to 3.56Mt for January to April 2022 compared to 3.44Mt in the same period in 2021. However, clinker production fell by 5% to 8.94Mt in 2021 from 9.45Mt in 2019. This trend seems to have continued into 2022 with a 9% fall to 2.54Mt for January to April 2022 compared to 2.81Mt in the same period in 2021. Despite this, California remained the second largest OPC and blended cement producer in the US in April 2022. In its Western US Regional Outlook in May 2022, the Portland Cement Association (PCA) forecast that the Pacific region of the US (including California) will experience flat growth in cement consumption in 2023 due to a slowdown in residential consumption. However, consumption is then expected to bounce back sharply in 2024 as the effects of the infrastructure bill take effect.
This suggests that CalPortland has picked an uncertain time to start buying cement plants in California. Yet only last year, in 2021, Cemex began restarting production at a previously mothballed cement plant in Mexico to supply the south-west US. Alongside all of this, environmental regulations are tightening. However, the key difference between Martin Marietta and CalPortland is that the latter is owned by Japan-based Taiheiyo Cement, which is more cement-focused than the aggregate and concrete oriented Martin Marietta. No doubt Taiheiyo Cement’s intention to become more international also played a part in its decision making. If CalPortland does decide to buy Tehachapi then this may give observers an idea of how much further its ambitions go.
Growing Portland limestone cement production in the US
16 February 2022Argos USA announced this week that its integrated Roberta plant in Alabama is set to produce 100% Portland limestone cement (PLC) by June 2022. As part of the transition three of its terminals in North Carolina will also switch over at the same time. The company also expects that all of its plants will convert to PLC in 2023. Cement sites including Newberry in Florida, Harleyville in South Carolina and Martinsburg in West Virginia are already producing PLC.
The change by Argos marks the latest example in an ongoing trend of US-based cement companies moving entire plants to PLC production. In September 2021 LafargeHolcim US said that its integrated Midlothian plant in Texas was preparing to convert to full PLC production and that it would be the first plant in the US to do so. It later confirmed that the plant had done so by the end of 2021. In October 2021 GCC said that its Trident Plant in Montana would fully move to PLC in early 2022. Then in November 2021 Titan America said that its Pennsuco cement plant in Florida would make the change possibly by 2023. Moving into 2022 brought the news that LafargeHolcim US’ Ste. Genevieve plant in Missouri and its Alpena plant in Michigan had each transitioned to PLC production. Lehigh Hanson then rounded up the bunch earlier this month, at the start of February 2022, when it announced that a PLC was the primary product now coming out of its Mason City plant in Iowa. It even invited a US Member of Congress to celebrate!
The current expansionist phase of PLC usage in the US dates back to late 2020 when the Portland Cement Association (PCA) launched a dedicated website to promote the use of the blended cement by discussing its applications and benefits. It then released a new environmental product declaration in March 2021 and PLC received a mention in the PCA’s Roadmap to Carbon Neutrality when it was released a year later in October 2021. Lots of work went into PLC prior to 2020 though, both by the PCA and others. The first commercial production of PLC in the US started in 2005 and PLC gained its own blended cement specification in 2012. Notably, the PCA has been tracking the state acceptance of PLC by the Department of Transportation and it grew markedly during the 2010s.
The US is playing catch-up with PLC. In Europe its usage dates back to the 1960s. Cembureau, the European Cement Association, reported usage of around 30% in 2004. More recently in 2020, the VDZ, the German Cement Association, reported a similar figure domestically with the proportion of blended cement shipments including limestone, shale and multiple additives at 31.6%. In the US it is hard to gauge the scale of the current move towards PLC by producers, due to limited publicly available data. A PCA survey reported PLC production of 0.89Mt in 2016. If all the plants mentioned above convert fully to PLC and maintain their rated production capacity that would be something like 14Mt/yr of PLC in 2023 or 11% of the US’s total cement capacity. For comparison, the United States Geological Survey (USGS) reported total shipments of all blended cements at 3.3Mt in 2020 and a total of 5.4Mt for the first 11 months of 2021. Plus, remember that PLC is just one blended cement among others, like those that use slag or fly ash.
Recent developments show that a large change is coming towards the US cement market in the update of blended cements. It’s been a long time coming but the last six months have seen brisk increases in PLC production at scale. The exact data is not available but one might expect something around triple the current number of production plants making PLC if the US market heads towards European levels. This rough estimate doesn’t take into account existing partial PLC production levels. At the same time the US cement sector should see a fall in its emissions due to PLC’s 10% reduction in CO2 emissions compared to ordinary Portland cement
Portland Cement Association reports 3.6% rise in cement consumption to November 2021
24 January 2022US: The Portland Cement Association (PCA) reports that cement consumption rose by 3.6% year-on-year in the first 11 months of 2021. Ed Sullivan, Senior Vice President and Chief Economist at the PCA, made the announcement at the World of Concrete trade fair in Las Vegas, Nevada. He also forecast that cement consumption would be driven by non-residential and public works in 2023 and 2024 as mortgage rates increased. The country is also set to spend US$1tn on new and rehabilitated infrastructure projects and this would consume 46Mt of cement over a five-year program. Over a quarter of this amount would be used on roads, bridges and resiliency structures.
The PCA’s president and chief executive officer Mike Ireland and Senior Vice President of Sustainability Rick Bohan also spoke at the event to further promote the association’s Roadmap to Carbon Neutrality.
Portland Cement Association welcomes US House of Representatives' US$1.2Tn infrastructure act
10 November 2021US: The Portland Cement Association (PCA) has expressed its support of the House of Representatives' new Infrastructure and Jobs Act, consisting of a US$1.2Tn infrastructure spending plan. The plan includes US$550bn in new federal investments before 2027. US$16bn is set aside for 'major projects' requiring special funding arrangements. The legislative body voted in favour of the bill on 7 November 2021. The act awaits the signature of US President Joe Biden. Biden previously unveiled a proposed US$2.25Tn infrastructure package in March 2021.
PCA president and chief executive officer Michael Ireland said "The PCA applauds the US House of Representatives for finally passing the Infrastructure Investment and Jobs Act. This bipartisan infrastructure bill not only addresses years of underinvestment in the nation’s infrastructure but will spur economic growth and job creation in communities across the country, improving the quality of life and our nation’s global competitiveness. As many are still recovering from the Covid-19 pandemic, this legislation will further our nation’s recovery, creating thousands of well-paying jobs."
He continued "PCA members across the country appreciate the legislation passing a long-term reauthorisation of the surface transportation programme, including significant investments in our water infrastructure, providing funding for the department of energy to focus on the research, developmentand deployment of technologies for manufacturers to capture carbon emissions, and the exemption of cement from Buy America requirements. We are eager for President Biden to sign this legislation into law and start building a better future for America.”
US: The Portland Cement Association (PCA) has published a roadmap to carbon neutrality for the cement and concrete sectors by 2050. It says that the strategy document demonstrates how the US cement and concrete industry, along with its entire value chain, can address climate change, decrease greenhouse gases and eliminate barriers that are restricting environmental progress. It added that the document is a ‘major step’ towards engaging US policymakers, industry partners and non-government organisations.
“Cement and concrete have been pivotal in building resilient, durable and sustainable communities that enable people to live safe, productive and healthy lives via structures that withstand natural and man-made disasters,” said PCA President and chief executive officer, Michael Ireland. “The PCA is uniquely positioned to lead the industry-wide ambition to achieving carbon neutrality and enable our member companies and industry partners to continue building a better future.”
The PCA’s roadmap outlines a number of reduction strategies across the various phases of the built environment including production at cement plants, construction including designing and building and everyday infrastructure in use. It also recognises five main areas of opportunity: clinker; cement; concrete; construction; and carbonation (using concrete as a carbon sink).
Notably goals include a reduction of coal and petcoke use at cement plants to 10% in 2050 from 60% at present, a clinker ratio of 75% in 2050 from 90% at present and a reduction of the CO2 intensity of concrete of 60% by 2050. The roadmap also noted the necessity of carbon capture and storage/utilisation (CCUS) for reducing CO2 emissions from cement production. However is pointed out that there are no commercial-scale CCUS installations at any cement plant within the US, location and permitting challenges remained and that infrastructure investment would be required to deal with the captured CO2.
US: Cemex USA’s Victorville cement plant in California has won the Portland Cement Association (PCA)’s Chairman’s Safety Performance Award 2021 in the Large category. The award recognises top safety performance. The Victorville cement plant previously won the award in 2019 and 2020. Cemex USA says that the plant recorded zero incidents in 2020. Earlier in 2021, it surpassed four years without a lost time injury to any employee or contractor.
President Jaime Muguiro said “Safety is our top priority, and Victorville cement plant is demonstrating that Zero4Life is possible. We are proud of the continued commitment of our team, and their achievement is a great example of what can happen when everyone is dedicated to safety and works together to look out for one another.”
US: The Portland Cement Association (PCA) has appointed Dave Nepereny as an honorary member. The role is awarded to those who, in the opinion of the PCA board of directors, have rendered outstanding service to the cement industry and the association. Nepereny was a former chief executive officer at Buzzi Unicem and as a member of the PCA board of directors, he served as a former chairman from 1994 - 1995. He also served as a board member to former PCA sister organisation, CTLGroup.
“Dave was actively involved with multiple aspects of PCA, setting an example as a former Chairman and chair for multiple committees, including the Membership Development, Market Development Council, and the Administrative council,” said PCA chairman and president of GCC of America, Ron Henley.
US: The Portland Cement Association (PCA) has supported a bipartisan deal between the White House and 21 senators towards a deal on a US$953bn infrastructure package. Sean O’Neill, the PCA’s Senior Vice President of Government Affairs, said that, “America's economic vitality depends on an integrated, national transportation network that moves goods and people safely and efficiently, while ensuring quality of life and economic prosperity for all citizens.” The PCA added that is has continually advocated for a long-term bipartisan infrastructure package and encouraged both parties in the House of Congress to work towards enacting ‘strong’ bipartisan infrastructure legislation.
PCA forecasts US regional cement consumption in 2021
15 June 2021US: The Portland Cement Association (PCA) Market Intelligence Group has released its Spring 2021 Regional Forecasts for the Northeast, Central, West, and Southeast regions. Residential construction has been identified as the main driver of consumption growth in most regions.
The Pacific sub-region of the West is forecast to grow by 1.1% year-on-year in 2021, while the Mountain sub-region will drop by 0.7% following strong growth in 2020.
The West South Central sub-region is expected to rise by 2.3% and the West North Central by 1.2%. In the former this will be supported by residential demand and a recovery in the oil well cement market. The PCA added that he sub-region maintains very strong construction fundamentals given demand from strong in-migration and an expanding tax base.
The PCA noted that the Northeast had been hit ‘hard’ by the coronavirus pandemic but that cement consumption still grew by 0.6% in 2020. In 2021 the association has forecast growth of 0.1%. Although residential construction is expected to drive demand the association said that the region is expected to lag behind national trends in public cement consumption given, “state fiscal conditions and the characteristics of the region.”
Finally, the PCA forecasts that cement consumption in the South Atlantic sub-region will be ‘strong’ with growth of 6.8% in 2021 and 2.1% in 2022. Demand in the East South Central sub-region is also expected to be positive with consumption growth of 7.6% in 2021 and 1.9% in 2022.
Portland Cement Association publishes Cement Consumption and Construction Activity Outlook for Spring 2021
12 April 2021US: The Portland Cement Association (PCA) has predicted a rise in US cement demand in 2021 and 2022 in its Spring 2021 Cement Consumption and Construction Activity Outlook. The report stated that mortgage rates are expected to remain low throughout 2021, prompting single-family construction. Non-residential cement consumption declines are expected to continue from 2020 in to 2021 and 2022, though with decreasing impact. Predicted oil price rises will increase oil well cement consumption.
The association welcomed a proposed US$2.2Tn eight-year federal government infrastructure spending programme. Chief economist and senior vice president Ed Sullivan warned of the proposal’s inherent political weakness in its inclusion of US$1.2Tn-worth of low or no-cement projects. He said that the opposition would latch on to this as grounds to oppose the necessary tax rises for the funding.
Sullivan said, “This recovery is predicated on continued progress in fighting Covid-19. The rapid pace of vaccinations and increased mask usage have resulted in a decline in death rates from over 3,000 daily in January 2021 to less than 825 daily in April 2021.” said Sullivan. “The Institute of Health Metrics and Evaluation (IHME)’s current forecast suggests a sustained and significant decline in daily Covid-19 deaths to less than 170. Progress associated with Covid-19 is the critical factor in the near-term outlook.” He added, “After committing to spending US$5.2Tn in Covid-19 relief and adding another US$2.0Tn in operations, the federal US debt could rise by US$7.0Tn in 2020 - 2021. This puts the discussion of the Biden US$2.2Tn infrastructure proposal into context. The proposal must pay for itself, which means higher taxes. While investing in traditional infrastructure such as roads and bridges has bi-partisan appeal, tax increases and some programmes dubiously labelled as infrastructure have caused concern. This concern threatens the potential passage of the initiative.”