Displaying items by tag: US

On 6 November 2024, Donald Trump appeared before followers in Florida, US, to declare victory in the 47th US presidential election. A sea of red baseball caps reflected the promise of the former president, now once again president-elect, to Make America Great Again. What Trump’s triumph means for the cement industry is not so straightforward. One lesson of President Trump’s 2017 – 2021 tenure as 45th president is that a Trump presidency comes with winners and losers.

Alongside the international heads of state posting their congratulations to Trump via social media was the Portland Cement Association (PCA), which represents US cement producers. In a post to LinkedIn, it took the chance to set out its priorities for the upcoming presidency, set to commence on 20 January 2025. These include collaborating on ‘market‐based initiatives’ to further reduce US cement’s CO₂ emissions, addressing ‘regulatory burdens’ that currently hinder the uptake of alternative fuels (AF) and ensuring favourable policies and funding for the use of alternative cements under federal transport programmes, which are up for renewal in 2026, as well as collaborating on carbon capture, utilisation and storage.

The post was suitably diplomatic for an organisation that will have to work with the incoming administration for the next four years. Reading the policy priorities against some of Trump’s campaign promises, however, they may be more pointed. As part of his plan to stimulate economic growth, Trump has proposed an unspecified reduction of the ‘regulatory burden’ of environmental standards. He also purports to want to replace renewables with increased use of fossil fuels – in direct opposition to the PCA’s goal to slash the US cement industry’s coal and petcoke reliance from 60% to 10% by 2050. The PCA’s stance is not merely ideological: its roadmap is founded on the legally-binding Paris Agreement on climate change mitigation. Trump, who considers the Paris Agreement a ‘disaster,’ has the stated aim of withdrawing the US from the treaty – for a second time!

The PCA included a positive note that “We can all agree that the ultimate goal of our industry and the government is to best serve the American people.” In case there were any doubt as to what it feels best serves those people, it concluded that it will work with all federal officials to help communities in the US to build ‘a more resilient, sustainable’ country.

Producers themselves, in the US and many other markets, had been finalising first-half or nine-month financial results when the Trump news broke. Now came half-anticipated strategy discussions – and a surprise: in market after market, trading in cement stocks opened on the up. Ireland-based CRH’s share price spiked by 15%, before settling on a rise of 6% day-on-day. Mexico-based Cemex’s rose by 7% and Switzerland-based Holcim’s by 5%. Investors, clearly, glimpsed opportunity in uncertainty for these US-involved operators.

Trump’s campaign successfully positioned him as the disruptive outsider, despite being the known (or, at least, known-to-be-unpredictable) quantity of the two candidates. His promise to Americans was increased affordability; to corporations, deregulation. Either way, he stands to overhaul the past four years’ policy on the economy. All of this may keep Wall Street high-ballers placing their bets on Cemex or CRH, or on Holcim North America after it eventually joins them on the New York Stock Exchange. The prospect of more money in homebuyers’ pockets is attractive, especially to allied sectors like property development, where Trump himself worked for over 40 years. The cement industry, meanwhile, will be taking a hard look at what the Trump proposition might mean for its market.

US Geological Survey (USGS) data tracks a favourable market trend under the present Biden Administration – to date – for a US cement industry that has also grown in production terms. Consumption was 120Mt in 2023, up by 14% over the three-year-period from 2020, while production was 91Mt, up by 4% over the same period. President Biden has signed into law two major pieces of legislation – the Inflation Reduction Act and Infrastructure Investment and Jobs Act – with a combined value of US$1.94tn in additional public spending, to President Trump’s none. However, the Republican president previously proposed investing an additional US$200bn in 2018.

Trump voters may have perused the USGS’ most recent monthly cement figures, for July 2024, before casting their votes. The figures recorded a 5.2% year-on-year decline in total cement shipments in the year-to-date, to 58.6Mt. Both Eagle Materials and Italy-based Buzzi noted a recent lack of growth in US sales volumes in their latest financial results. Another possibly alarming trend for the industry – and anyone with a protectionist mindset - is the growth of imports, which rose from 14.8Mt in 2019 to 26Mt in 2023.

A defining feature of Trump’s original presidency, alongside Covid-19 lockdown, was his still-ongoing trade wars. We can expect Trump to resume his roll-out of new tariffs as soon as he can. This might include cement plant equipment produced in other jurisdictions, such as the EU. Compared to the roster of goods he previously denied entry to the US, however, 26Mt/yr of cement will be less easy to wrangle with in a country with a domestic shortfall of 29Mt/yr.

Whatever happens in politics, the US cement sector remains very strong, with historied local ownership and some of the most innovative plants in the industry globally. Global players continue to seek to maximise their US-facing presence, as evidenced by Brazil-based Votorantim Cimentos’ contemplation of an initial public offering (IPO) for Votorantim Cimentos North America, announced on 7 November 2024. For the industry, the day-to-day grind – and pyroprocess – goes on.

After all, Trump did not enact many of his more disruptive proposals, such as building a Mexican border wall, after his win in 2016. See Global Cement’s analysis of that proposal here. But even this record is an unreliable guide for what to expect in 2025 – 2029. Not only did Trump himself win the popular mandate this time around, but his allies also gained majorities in the House of Representatives and Senate, comprising the US legislature. This betokens a different pace and scale of possible changes.

In 10 weeks’ time, the US cement sector will be lobbying an entirely new regime. Now is the time for it to prepare whatever arguments will appeal to incoming lawmakers to allow it make the best of such opportunities as may be available.

Italy: Buzzi’s net sales decreased by 4% year-on-year to €3.18bn in the first nine months of 2024 from €3.30bn in the same period in 2023. Its cement and ready-mixed concrete sales volumes fell by 6% to 18.8Mt and by 8% to 7.74Mm³ respectively. The group attributed the declines to a “…challenging market environment in Central Europe and the lack of recovery in Italy and the US during the summer.” However, sales were up in Poland and the Czech Republic.

Italy: Cementir Holding has blamed a fall in earnings in the first nine months of 2024 on “lower results achieved in all geographical areas except Egypt.” It added that sales had fallen due to a decrease in volumes in some places and negative currency effects in Türkiye and Egypt. The group’s revenue fell by 5% year-on-year to €1.24bn in the first nine months of 2024, from €1.30bn in the same period in 2023. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 9% to €296m from €326m. Sales volumes of cement and clinker remained stable at 7.98Mt. It noted that volumes increases were reported in Türkiye and, to a lesser extent, in Malaysia and the US. However, volumes of ready-mixed concrete rose by 5% to 3.33Mm³ from 3.18Mm³.

Francesco Caltagirone Jr, chair and CEO, said “The results for the first nine months of 2024 are in line with our expectations and, after several quarters of contraction, signs of a market turnaround in some geographies are emerging in the third quarter of 2024. We are strengthening our competitive position through initiatives such as: the investment on Kiln 4 in Belgium, the restart of the second line in Egypt, the acquisition in concrete in Nordic & Baltic, a new limestone quarry in Malaysia, and the repurchase of a large part of the minority interest in our Egyptian subsidiary, to prepare ourselves for any upcoming market opportunities”.

US: Votorantim is in the early stages of preparing for a potential initial public offering (IPO) of its North American cement business. The offering could occur as early as 2025, contingent on market conditions, according to InvestNews. The company is reportedly still in talks and has not made a final decision regarding the launch of the IPO.

US: Summit Materials has announced a 50% year-on-year increase in net revenue to US$1.11bn for the third quarter of 2024, attributed largely to the acquisition of Argos US. The company's operating income rose by 52% in the third quarter to US$195m. Despite these gains, net income decreased to US$105m from US$230m in the same period in 2023. Adjusted earnings by interest, taxation, depreciation and amortisation (EBITDA) for the quarter increased by 51% to US$314.7m, reflecting contributions from the Argos US assets, pricing gains and operational improvements.

The cement segment saw net revenues rise to US$323m. However, organic sales volumes fell by 11% due to adverse weather and moderating demand, leading to lower imported volumes. For the full year 2024, Summit has adjusted its EBITDA forecast to between US$970m and US$1bn and expects capital expenditures to be between US$390m and US$410m.

Another potentially gargantuan deal in the US building materials sector emerged this week in the shape of Quikrete bidding to buy Summit Materials. The latter company announced that a non-binding acquisition proposal had been received and the business press revealed who it was from. Further reporting suggested that Summit Materials has a market value of around US$7bn.

Quikrete is well known in North America for its packaged concrete products that are often sold in distinctive yellow bags. Its brands include Quikrete cement and concrete, Pavestone and Keystone paver and block products and Rinker concrete pipe and storm-water products amongst others. The company says it operates over 90 manufacturing sites in the US, Canada, Puerto Rico and South America, although it does not appear to own any cement plants. Notably, it is privately owned.

The deal is likely to revolve around the ready-mixed concrete assets that Summit Materials runs. However, readers may recall that Summit Materials and Cementos Argos completed the merger of their operations in the US at the start of 2024. That deal was set to make Colombia-based Cementos Argos the largest shareholder in Summit Materials. The companies also said that it was going to set them up with the fourth-largest cement-making portfolio in the US, with a capacity of 11.6Mt/yr, and place them among the largest aggregates and concrete producers. So it will be interesting, to say the least, to see how Cementos Argos reacts to a change in plans so soon after the merger has finished. Assuming the deal is credible, how it reacts may suggest whether the company is following the money in the short term or sticking to a longer plan.

Yet another large deal in the building materials sector in North America reinforces the diverging fortunes between the markets there and in Europe. However, this dynamic can create its own problems. More details about Holcim’s spin-off of its business in North America, for example, emerged in October 2024. Press reports suggested that the group was considering a dual-listing as its Swiss and other European shareholders were potentially facing restrictions from holding shares outside of their home markets.

Despite the current frenzy for market share and margin in the US by multinational building materials companies though, the cement market hasn’t had the best year so far in 2024. US cement shipments actually fell year-on-year in 2023 and continued to do so during the first seven months of 2024, according to United States Geological Survey (USGS) data. The Portland Cement Association (PCA)’s Chief Economist Ed Sullivan blamed this mainly on high interest rates. He then noted in an autumn forecast that a cut in rates was likely to benefit the construction market from mid-2025 onwards. Anne Noonan, the CEO of Summit Materials, also noted the negative effect of interest rates on construction projects at a recent Colorado Business Roundtable event.

None of this has discouraged the hunger of companies to cash in on the US market. Even the uncertainty of the impending US presidential election taking place on 5 November 2024 has failed to quell this desire. In brief, either administration might take different approaches to trade protectionism, infrastructure investment plans, green investment, permitting, regulations and so on. Yet the market fundamentals are strong for building materials. Koch helped MITER Brands buy window and door manufacturer PGT Innovations for US$3.1bn in January 2024 and Owens Corning acquired another door producer, Masonite, for US$3.9bn in May 2024. Quikrete smells potential and it may follow.

US: Eagle Materials' quarterly revenues hit US$624m in the first half of the 2025 financial year, with net earnings of US$144m and earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$242m. The company’s cement revenues dropped by 2% year-on-year, to US$353m, resulting in a 5% fall in its operating earnings from cement, to US$116m, exacerbated by increased maintenance costs. Cement sales volume declined by 5% year-on-year to 2Mt, affected by adverse weather in Texas in July 2024 and Eastern US markets in September 2024.

US: Terra CO₂ has received a US$52.6m federal grant from the US Department of Energy to support the construction of a new plant in Magna, Utah, that will produce up to 240,000t/yr of supplementary cementitious materials using mining waste from the nearby Kennecott copper mine. This method reportedly aims to cut CO₂ emissions by 70% per tonne of traditional cement replaced, according to the company’s CEO Bill Yearsley. The project is expected to create 61 jobs.

US: Bagged concrete and cement mixes producer Quikrete has submitted an acquisition offer to cement, concrete and aggregates company Summit Materials. Summit Materials is reportedly valued at over US$7bn. The company confirmed to Reuters that its board is in initial discussions over a non-binding acquisition proposal.

Summit Materials combined its business with Cementos Argos subsidiary Argos USA in January 2024.

US: California-based climate technology startup Furno Materials has been awarded US$20m by the US Department of Energy (DOE) for a new ‘low-carbon’ cement production facility in Chicago. The facility will use recycled industrial byproducts to produce cement, with the aim to reduce carbon emissions ‘significantly’, according to the Chicago Business Journal. This investment is part of a broader DOE initiative that is funding 14 projects totalling US$428m, in order to address clean-energy supply chains and boost US manufacturing. The project is expected to create 80 jobs.