Displaying items by tag: Portland Cement Association

US: Ed Sullivan, the Portland Cement Association’s (PCA) Senior Vice President and Chief Economist, forecasts that cement consumption will grow ‘moderately’ in 2019 alongside similar performance in the general US economy. However, he flagged gradual increases in interest rates, the aging recovery and accompanied trade issues as possible factors slowing down the cement market. Sullivan made his comments at the World of Concrete event in Las Vegas, where he revealed details from his forthcoming spring forecast.

“The US economy’s long run of growth should continue in 2019,” said Sullivan. “Since 2011 we have averaged 2 million jobs being created each year and the unemployment rate is below 4%. Despite the headlines, the impact in the near term of the rising interest rates and inflation are relatively benign. Simply put, fundamentals like these take a long time to unwind.”

US: The Portland Cement Association (PCA) forecasts that cement consumption growth will drop to 2.6% in 2019 and 1.6% in 2020. This compares to 2.9% in 2018. The PCA’s Market Intelligence Group has blamed the softening on rising interest rates, local financial problems at the state level and a general end to the recovery period following the financial crash in 2008.

“We are expecting relatively modest but sustained interest rate increases after 10 years of low and stable rates,” said PCA Senior Vice President and Chief Economist Ed Sullivan. “The Federal Reserve’s actions will gradually slow the construction sector’s growth due to, among other things, the higher mortgage rates for residential buildings and higher borrowing cost for non-residential buildings.” He added that tax cuts passed at the end of 2017 had boosted the overall economy but that rising debt levels was likely to frame the discussion of future federal public infrastructure spending.

Well, it turns out that the European cement industry wasn’t kidding when it raised the risks of the climate mitigation on the sector. This week three (!) integrated plants have been earmarked for closure.

Cementa in Sweden said that it was considering closing its Degerhamn plant due to increased environmental regulations. Today, local press in Spain is reporting that Cemex España is planning to shut down two of its plants. These are plants in different parts of Europe with different local market dynamics but both are within the European Union (EU). That’s three plants closing out of 219 in the EU, or a loss of around 1% of production capacity.

Last week’s column on the United Nations’ (UN) Intergovernmental Panel on Climate Change (IPCC) report on Global Warming raised the way the cement sector is tackling climate change and the existing and impending legislation. President of the German Cement Works Association (VDZ) Christian Knell’s opening words at the VDZ Congress in September 2018 seem prescient. He said, “To be able to realise our efforts in terms of climate protection and at the same time not to lose competitiveness, we need research policy-related support for our investment in breakthrough technologies and the corresponding demonstration projects.” The add-on was that the industry needed to focus on how the development of carbon abatement technologies can meet the 2050 climate goals and, specifically, that suitable boundary conditions would have to be created. The press releases accompanying his speech emphasised that, “on-going trends in European emissions trading and the ‘rapidly increasing’ price of CO₂ were already today leading to considerable costs for cement manufacturers.”

These words are similar to the comments Albert Scheuer, a board member of HeidelbergCement, made at the Innovation in Industrial Carbon Capture Conference early in 2018 about dividing the mounting environmental costs of cement and concrete between producers and society in general. Considering how much cementitious building materials most people use throughout their lives compared to the relative low price of cement, this argument carries some weight. In addition, the sustainability credentials of concrete buildings through longer lifespan and durability through extreme weather events is another argument that industry advocates such as the Portland Cement Association (PCA) in the US have been hawking in recent years.

Cementa, a subsidiary of HeidelbergCement, blamed anticipated tightening of environmental regulations for its decision. Although it said that the plant had made improvements over the years, the expected difficulty (read: cost) to make further improvements was becoming too hard. Shifting production to the company’s other two plants in the region, Slite on Gotland and Brevik in Norway, will reduce CO₂ emissions by 260,000t/yr.

In Spain, the news from Cemex follows a half-year report from Oficemen, the local cement association, that predicted growth for the year but not as fast as previously expected. The problem was that continued declines in the export market, the 13th decline month-by-month in a row, offset the domestic growth. Oficement president Jesús Ortiz also took time to blame rising electricity costs, expected to rise by 20% year-on-year by the end of 2018.

Market issues in Spain aren’t in doubt, but the real question for both Sweden and Spain is whether EU CO₂ legislation right now is causing cement producers to shut plants. The CO₂ emissions allowance price hit a high of Euro22/t in September 2018, the highest price in a decade. Allowances have stayed below Euro10/t since 2011 and the price has more than doubled in 2018. Throw in the mood music of the IPCC and the trend seems irresistible. How many more plants in Europe are at risk to shut next? No doubt the European cement producers have charts marking the viability of their plants against the CO₂ price. This would be a very interesting graph to get our hands on.

The 2nd FutureCem Conference on CO₂ reduction strategies for the cement industry will take place in May 2019 in London, UK

UK: The Global Cement and Concrete Association (GCCA) reports that it continues to grow, with the addition of several new member companies from Europe, South America and Asia. In August 2018 there were six new members: Buzzi Unicem, Cementos Argos, Cementos Pacasmayo, Çimsa Çimento, SCG Cement and Titan Cement. The GCCA also welcomed the US Portland Cement Association (PCA) as an Affiliate.

Albert Manifold, GCCA President (and CEO of CRH) said, “We are delighted to welcome further cement and concrete companies and like-minded organisations to the GCCA. The GCCA was set up to provide the authoratitive global voice for this essential sector. With every new member, the voice becomes even stronger.”

The new members and affiliates join 10 existing member companies: Cemex, CNBM, CRH, Dangote Cement, Eurocement, HeidelbergCement, LafargeHolcim, Taiheiyo Cement, UltraTech Cement and Votorantim. Further applications for member and affiliate status have been received and are being processed.

US: The Portland Cement Association (PCA) has called on the US Congress to reauthorise Federal legislation to build, maintain and improve the country’s water infrastructure. The US House of Representatives is considering two-year reauthorisation of the Water Resources Development Act of 2018, while the US Senate is considering companion legislation, America’s Water Infrastructure Act of 2018.

“America deserves safe, strong and resilient water infrastructure – our economy depends on it,” said PCA President and chief executive office (CEO) Michael Ireland. “Water infrastructure built with concrete is long-lived, has a low life-cycle cost and is resilient to man-made and natural disasters. We need this legislation to ensure our drinking water is safe, our waterways are navigable and secure and that we have water infrastructure capable of serving generations to come.”

The PCA supports reauthorisation of water infrastructure legislation to include: increased investment in waterway and flood control infrastructure; increased funding for water infrastructure construction programs; and to promote resilient construction techniques that use materials such as concrete.

US: The Portland Cement Association (PCA) has announced the winners of the 2018 Safety Innovation Awards. The awards recognise creative safety-enhancing projects in the cement industry. Winners were determined by a panel of judges that evaluated submissions from across the country for milling/grinding, distribution, pyroprocessing and general facility.

Cemex USA’s Miami plant Florida won the milling/grinding category with its new process to load ball mills. The site developed a new mill loading process that uses a small hopper for grinding media, and an incline transport system with buckets to convey the grinding media directly to the mill. This new system eliminates the interaction between the employee and the machine, reduces the number of people needed to load the mill from five to two, and eliminates the need for employees to stand on top of the mill. This new system also improves mill loading rates from seven drums/hr to 30 drums/hr.

Cemex USA’s Houston operations in Texas won the pyroprocessing category for it use of drones for hazardous inspections. It has implemented a system for using protected air drones to inspect enclosed and confined spaces. Visual inspections of enclosed areas (preheater towers, tanks, silos, process ducts, etc) normally require intrusive equipment, long delays for system cooling, and placement of employees on scaffolding in confined spaces. These drones utilise an outer protective cage to minimize the risk of breakage due to impact. The drone program has eliminated the risk of putting staff in confined spaces, reduced the cost of scaffolding, and reduced the overall time for inspections.

LafargeHolcim US’ Corporate Program in Chicago won the distribution category for its X-Factor barge cover. It has developed a process for barge cover removal that reduces the risk of falls from employees stepping on to the barge. The X-Factor barge cover, developed over the last three years with a contractor, uses the latest technology and a no-touch design to allow a crane operator to perform all functions associated with barge lid handling without additional human assistance. Barge workers will no longer be required to step onto the barge to remove or replace barge covers, eliminating a potential fall risk.

Ash Grove Cement’s Louisville plant in Nebraska won the general facility category for its use of magnets as duct hole patches. Ash Grove has developed a hole-patch technique using magnets. Magnetic patches are quick, simple, and effective at preventing or limiting the release of materials from holes created in ducts caused by abrasion, leading to a cleaner plant, reduced slip, trip and fall risks, and fewer related Mine Safety and Health Administration housekeeping citations.

Cemex USA’s Brooksville in Florida also won the general facility category for its filters moved to ground level project. It redesigned the blower housings to move the filter from the top of the blower housings to an easily accessible location at ground level. The redesigned blower housing eliminates the need for employees to climb up and down a ladder, reducing overexertion and fall hazard.

US: The Portland Cement Association (PCA) predicts growth of 2.8% in cement consumption in 2018 and 2019 in its Spring Forecast. Growth is then expected to climb to 4% in 2020 as impacts from potential federal infrastructure spending are likely to take effect. The analysis estimates cement consumption at 99.3Mt in 2018, 102.1Mt in 2019 and 106Mt in 2020.

Ed Sullivan, PCA senior vice president and chief economist, has attributed the forecast growth to a variety of positive economic factors including a strong economy, job market and anticipated increase in infrastructure spending. He said that in combination these factors, “suggest a modest acceleration in real GDP, construction markets and cement consumptions.”

However, the PCA projects that ‘robust’ infrastructure spending isn’t likely to occur until the fourth quarter of 2019, given the key steps that must occur, including passage of an infrastructure bill, federal and state paperwork, bid letting and review and finally contract awards leading to construction.

The latest data from the United States Geological Survey (USGS) shows that cement shipments rose by 2.4% year-on-year to 95.5Mt in 2017. Readers with elephantine memories may remember that the Portland Cement Association (PCA) revised its forecast for 2017 down to 3.1% from 4.2% in a release made in late 2016. Shipments and consumption are different metrics but the PCA was heading in the right direction. Unfortunately, however ebullient the PCA’s chief economist Ed Sullivan was at the IEEE-PCA in 2017 about growth in the US in 2018 and 2019, the necessary rise required seems quite steep. President Donald Trump may have handed the major cement producers a tax break but until his infrastructure spending materializes the US construction industry is on its own.

Graph 1: Clinker production in the US, 2013 – 2017. Source: USGS.

Viewing the US as a whole is a little unfair given its wide regional variation. As can be seen in Graph 1 clinker production jumped up from 2013 to a high of 76.5Mt in 2015 before taking a dip in 2016 and then rising again to 76.9Mt in 2017. Cement shipments of Ordinary Portland and blended cement show a similar trend over the same timescale except without the decrease in 2016. Interestingly, imports of cement and clinker rose by 18% to 13.6Mt in that year. The major exporters to the US were Canada, Greece, China and Turkey, in that order.

Graph 2: Cement and clinker imported for consumption to the US in 2017 by country. Source: USGS.

From a producer perspective LafargeHolcim described 2017 as a ‘disappointing’ year, with overall net sales down slightly on a like-for-like basis. The group remained optimistic for 2018 though, with its hopes pinned on rising employment and housing construction. HeidelbergCement rode high on its acquisition of Italcementi’s local subsidiary Essroc, which enabled it to grow its business in the northeast and midwest. Its cement sales volumes rose by 2.3% to 4.1Mt. CRH noted similar cement sales volume growth of 3% and attributed this to stronger demand. Its business also benefited from the acquisition of Suwannee American Cement with its 1Mt/yr cement plant in Florida. Further growth to its production base is also expected soon as it completes its acquisition of Ash Grove Cement.

By contrast Buzzi Unicem reported a tougher year with its net sales barely increasing from 2016 to 2017. It blamed a tough first half of the year for this as well as weather-related issues due to Hurricane Harvey and then snow in December 2017. Cemex too reported harder conditions in the US, with cement sales volumes down by 6% for the year. Although on a like-for-like basis with plant sales excluded it reported this as a rise of 2%. Again, it blamed the weather but it did note an increase in residential housing construction as the year progressed.

In this kind of mixed environment for cement producers no wonder the PCA backed or, perhaps more accurately, reminded the President of his pledge to spend US$1.5tn to be invested in infrastructure. As per usual the PCA forecasts fair weather ahead for the US industry once the latest roadblock is overcome. At the last assessment it was inflationary pressure. As ever the government opening its cheque book to build things is exactly what the industry needs to build on its promise. Until then expect more of the same. One more thing to consider though is that the Trump administration is also trying to change the ratio of federal-to-state funding for cross-state infrastructure projects. If the states end up having to pay more money for these kinds of projects these may end up running out of funds, delaying or cancelling them. Counting on that infrastructure spend may be unwise until if or when the cement orders come piling in.

US: The Portland Cement Association (PCA) has supported an infrastructure study by the American Council for Capital Formation (ACCF). It liked how the study highlighted the importance of life cycle cost analysis and competition in paving. “If federal and state decision makers took this report as a playbook, America would see tremendous taxpayer cost savings and stronger infrastructure built to last long into the future,” said PCA President and chief executive officer (CEO) Michael Ireland.

US: The Portland Cement Association (PCA) has backed President Donald Trump’s call for US$1.5tn to be invested in infrastructure. It has urged the US Congress to take ‘swift’ legislative action to fund and sustain such projects.

“America’s cement producers are proud to play a critical role in what the president so aptly described as our nation of builders,” said PCA President and chief executive officer (CEO) Michael Ireland. “Today, our industry is ready to help America both rebuild long-neglected infrastructure, and construct new-and-improved transportation networks capable of serving the nation long into the future.” He added that the cement industry also supported the need to address significant federal funding gaps including a shortfall in the Highway Trust Fund.