Displaying items by tag: United States Geological Survey

CalPortland 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.

Cement shortages were being reported in the US media last week in Alabama and South Carolina. The owner of a ready-mixed concrete supplier in South Carolina was blaming it on labour and supply shortages. Dan Crosby, the president of Metrocon, told Fox News that his business could only take on 60% of the work it could normally cope with due to the issue despite demand for construction growing in the state. Meanwhile, the Alabama Concrete Industries Association said that its home state saw a 14% increase in the demand for concrete in 2021 but that a cement shortage might cause delays to projects. The association also pointed the blame at labour and supply issues. It pointed out that high demand for concrete during the winter prevented inventory being built up and then the annual cement plant maintenance breaks in the spring added to the problems. Once contractors actually secured supplies of cement they then faced further delays due to a nationwide truck driver shortage!

Graph 1: Annual rolling cement shipments in the South of the US. Source: USGS.

Data from the United States Geological Survey (USGS) doesn’t especially shed light on the situation in Alabama and South Carolina. Alabama was the fifth largest cement producing state in the country in January 2022 but this is unsurprising as it’s the state with the fifth largest cement production capacity. Rolling annual data on Portland and blended cement shipments by origin show the effects of the coronavirus outbreak in the south from the start of 2020 to January 2022. Shipments took a dive in 2020 and then mostly recovered in 2021. However, Alabama, Kentucky and Tennessee saw shipments rise from 7.1Mt pre-pandemic to 7.6Mt in January 2022. South Carolina’s shipments grew from 3Mt to 3.2Mt. Regionally, the North East had a similar pattern although, unlike the South, shipments have surpassed those at the start of 2020. The Midwest and West were different with a general upwards trend over the two years, although the West softened slightly from mid-2021 onwards. Overall the US as a whole has seen its shipments grow throughout this period.

Ed Sullivan from the Portland Cement Association (PCA) told the May 2022 issue of Global Cement Magazine that the US cement sector did well in 2021 with a 4.1% year-on-year rise in sales to 104Mt. However, he flagged up supply chain problems that actually slowed growth, led by a lack of staff.

The other point along these lines that Sullivan made was that imports of cement might not necessarily be able to compensate for domestic supply issues due to global demand for shipping post-coronavirus. USGS data placed imports to the US at 13.7Mt in 2019 compared to 16.3Mt in 2021. Notably, Cemex restarted one production line in 2021 at its CPN cement plant in Sonora State in Mexico to export cement to the west of the US. In March 2022 it added that it was going to restart another line at the plant also. It’s not alone though as GCC reported in January 2022 that a line at one of its plants in Chihuahua, Mexico, was exporting cement to Texas. Sullivan reckoned that January 2022 was ‘weak’ but that it was followed by an ‘extremely strong’ February 2022. The first quarter results from Holcim and CRH seem to back this up with the former describing the period as ‘outstanding’ and the region leading its sales and earnings growth rate globally. CRH reported strong demand in central and southern regions.

As the US economy restarted following the peak of the early coronavirus waves in 2020, various supply chain issues have manifested. Staff shortages are one issue and this can also worsen other logistic problems. The south seems particularly vulnerable to all of this as it is both the country’s largest cement market and because demand has held up. In January 2022 research by the International Monetary Fund (IMF) identified several reasons for staff shortages in the US and the UK. These included increased inactivity among older workers, the so called ‘She-cession’ (where female employment has overly reduced due to coronavirus trends) and shifting worker preferences amid strong labour demand.

Staff shortages are expected to sort themselves out throughout 2022 but favourable forecast demand for cement in the US is balanced by inflationary pressure. Persistent low staffing levels could further add to inflation growth. The US cement sector may be doing well at the moment but even success carries risks.

Global Cement’s Robert McCaffrey will be giving a keynote presentation at the IEEE-PCA Cement Conference in Las Vegas on Tuesday 3 May 2022. The May 2022 issue of Global Cement Magazine, including interviews with PCA chief executive officer Mike Ireland and chief economist Ed Sullivan, is available to download now.

US: Cement companies produced 79.2Mt of cement in 2021, according to United States Geological Service (USGS) data. The figure corresponds to a 0.1% year-on-year rise from 79.1Mt in 2020. Texas contributed 10.7Mt, 13% of the production total, followed by Missouri with 8.97Mt (11%) and California with 8.94Mt (11%).

US: Cement shipments grew by 4.2% year-on-year to 107Mt in 2021 from 103Mt in 2020. Data from the United States Geological Survey (USGS) show that domestic shipments and imports rose by 2.3% to 90.8Mt and 16% to 16.3Mt respectively. Regionally, particular gains were reported in New England and Middle Atlantic, West North Central, Arkansas, Oklahoma, Arizona and New Mexico. Puerto Rico reported a 47% decline in shipments. The largest cement exporting nations to the US were Turkey, Canada, Greece, Mexico and Vietnam. Turkey, Greece and Vietnam each increased their imports by over 30% in 2021.

Argos 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

US: Total shipments of cement in the US in the first 11 months of 2021 were 99.2Mt, up by 4.1% year-on-year from 95.3Mt in the corresponding period of 2020. The country imported 15.2Mt of cement, up by 17% from 13Mt.

Domestic clinker production for the year totalled 72.2Mt, up by 0.4% from 71.9Mt.

US: The United States Geological Service (USGS) reported total cement deliveries of 89.7Mt in the first 10 months of 2021, up by 3.5% year-on-year from 86.7Mt in the corresponding period of 2020. Imports over the period totalled 13.8Mt, up by 17% from 11.8Mt.

10-month clinker production was 65.1Mt in 2021, up by 0.5% from 64.8Mt in the first 10 months of 2020.

US: Cement companies in the US produced 57.8Mt of clinker in the first nine months of 2021, in line with production in the corresponding period of 2020. Cement shipments including imports rose by 4.2% year-on-year to 79.9Mt from 76.7Mt, according to the United States Geological Service (USGS). The lead cement consuming states by total shipments were Texas, California and Florida. Texas received 11.4Mt of cement (14% of the national total), down by 8.5% from 12.4Mt, California received 8.19Mt (10%), up by 7.8% from 7.6Mt and Florida received 5.4Mt (6.8%), up by 5.6% from 5.11Mt.

US: The US Geological Survey (USGS) recorded a 0.8% year-on-year increase in total US cement shipments in the first half of 2021 to 50.4Mt from 50.0Mt in the first half of 2021. Domestic deliveries constituted 85% of the total at 42.6Mt, against 7.75Mt of imports (15%). Clinker imports were 1.23Mt, with a total value of US$81.6m. Turkey was the lead exporter of clinker to the US in 2020 at 470,000t (38%), followed by Saudi Arabia with 466,000t (38%) and Canada with 276,000t (22%).

Global Cement Weekly celebrates its 500th edition this week. This corresponds to nearly a decade’s worth of news and comment upon the cement industry, since the first edition went out in early June 2011. Time is brief, so the quick version of all of this is as follows: China; production growth; production overcapacity; grinding; corporate mergers; regionalisation; CO₂; digitisation; and coronavirus.

Those looking for the longer version should read Peter Edwards’ review of the 2010s in the December 2019 issue of Global Cement Magazine. Although be warned, few were expecting a global pandemic to rock markets and possibly hasten future trends when that article was written. Those looking for the even longer version should read the last 10 years of the magazine and the website… and then let us know what we missed.

Looking back at the first few editions of Global Cement Weekly brings to mind the LP Hartley quote, “the past is a foreign country; they do things differently there.” It’s all very familiar until one comes across the little things that makes one realise how much has actually changed.

For example, countries were imposing import tariffs on cement, companies were buying each other, national cement associations were lobbying hard for their members and cement plants were investing in alternative fuels equipment. All that stuff has been happening continually over the last decade and right into this week, with Russian media announcing who has won the auction to buy Eurocement and LafargeHolcim closing its deal to buy Firestone Building Products. Yet, Lafarge and Holcim were still separate companies and Italcementi was independent in 2011. On the sustainability side, Norcem and its parent company HeidelbergCement Group, with the European Cement Research Academy (ECRA), had just started a partnership agreement with Aker Clean Carbon (ACC) to study post-combustion CO₂ capture technology at Norcem’s plant in Brevik, Norway. Jump forward nine years and Norcem signed a deal with Aker Solutions in mid-2020 to order a full scale CO₂ capture, liquification and intermediate storage plant at Brevik.

The big numbers from the United States Geological Survey (USGS) show that global cement production grew by 24% to 4.1Bnt in 2020 from 3.3Bnt in 2010. However, the big growth had stopped by around 2013 and production has hovered between 4.0Bnt/yr and 4.2Bnt/yr ever since. Alongside this, Getting the Number Right (GNR) data indicates that net CO₂ emissions for cementitous products fell by 4% to 610kg/t in 2018 from 636kg/t in 2010. The former may show a levelling off of production as the Chinese market stabilised in the 2010s but the latter shows the progress that has been made in reducing cement-related CO₂ emissions and the scale of the challenge that remains ahead.

Graph 1: Embodied energy versus embodied CO₂ of building materials. Source: Hammond & Jones, University of Bath, UK.

Cement industry readers should not lose heart about the future of the industry though, while environmental pressure continues to mount. Graph 1 above shows the embodied CO₂ and energy of common building materials. Cement has been rightly identified as a major emitter of CO₂ but any society that desires to build strong structures cheaply and at scale requires concrete to do so whilst the data above remains unchallenged. The ratios may change, such as the perennial energy-cost influenced tug-of-war between asphalt and concrete roads, but concrete remains the only game in town. For now. At which point cement production becomes all about reducing the CO₂ emissions or capturing them, and determining who exactly pays for this. This then brings us to the present with the European Union Emissions Trading Scheme carbon price of over Euro40/t and other schemes popping up all around the planet. One echo from one of the early editions of Global Cement Weekly was the furore over Australia’s attempt at a carbon tax in the early 2010s. It was repealed in 2014.

One prediction about how the 2020s might be summarised for the cement industry is this: how to get away with pumping out all that CO₂? Let’s see what the next decade will bring.