Forget Europe! The US cement industry is back in the game and could be looking forward to growth of 8.1% in cement consumption, according to a new forecast from the Portland Cement Association (PCA). This compares to a growth of 6% in consumption the PCA predicted in the autumn of 2012 in the shadow of the US 'fiscal cliff'.
The new forecast is based upon PCA research that estimates that total residential housing starts will reach 954,000 units in 2013. To give an idea of how badly the 2007 financial crisis hit the US residential housing market, according to US Census Bureau data in 2005 a total of 2,068,300 total housing start units were recorded. In 2007 this fell to 1,355,000 units. By 2009 this levelled out at 554,000, the lowest figure since at least 1960. A loose comparison with Spanish cement consumption in 2012 is worth noting here, when it too hit levels not seen since the 1960s.
The PCA's report predicts US cement consumption of 78.5Mt in 2013. As we pointed out in our overview of the US Cement Industry in the May 2012 issue of Global Cement Magazine, in 2006 the cement consumption of the United States was 122Mt. When the financial crisis hit, consumption nearly halved to 67Mt in 2009. The prediction for 2013 is a great improvement but the levels of 2005 are still a long way off. Currently, the Global Cement Directory 2013 places US cement production capacity at 114Mt/yr.
Other encouraging signs for the US cement industry include the sale of two Lafarge plants to Eagle Materials in September 2012 and less industry anxiety over US Environmental Protection Agency (EPA) emissions legislation. Lafarge choosing to sell plants in Missouri and Oklahoma with the US market starting to recover suggests that the French producer may have had its doubts. Yet Eagle Materials certainly thought the plants were worth the price tag of US$446m.
In summary the signs are broadly positive for the US cement industry at the start of 2013 although the dizzy heights of consumption of the early 2000s seem a long way off. US cement producers may take comfort from recent news stories from Beijing about efforts to contain air pollution from a cement plant. Hopefully for them it will be a case of 'been there, done that'.