U.S. national Portland cement shipments in November totaled 8.81 million, (Mt) short tons. For the three months total (3MMT), ending November, cement shipments were up slightly year on year, (y/y). Five of the nine census regions posted higher 3MMT cement shipments y/y.
Figure 1 shows the three month moving average shipments in tons per month on the left-hand Y axis and the 12 month moving total on the right-hand Y axis. Note that 12 month moving total, (12MMT) growth has plateaued after steadily rising since the recession ended. Year to date through November, cement shipments totaled 94.60Mt, up a modest 0.2% y/y.
Figure 2 presents a map of the US by census region. The tonnage values are in 3MMT and the percentage change is 3MMT y/y. Green denotes growth, red means decline. Shipment volume for the total U.S. market was up 1.3%, 3MMT y/y with shipments of 28.17Mt for the 3 months ending November 2017 compared to 27.82Mt for the same period last year.
The largest consuming region was the West South Central with 5.42Mt, up 3.8%, 3MMT y/y. The region with the second largest 3MMT consumption of 4.82Mt was the South Atlantic. Shipments in the South Atlantic decreased by 0.7%, 3MMT y/y. Florida’s October and November shipments rebounded after a weak September shipment as a direct impact from hurricane Irma. The third highest consuming region was the East North Central which consumed 4.08Mt, 3MMT, down 4.0% y/y.
The Pacific regions’ consumption surged 12.7%, 3MMT y/y to 3.91Mt, by far the largest percentage increase nationwide. The Mountain zone region posted a strong 7.6%, 3MMT y/y growth, consuming 2.74 Mt of cement. The Middle-Atlantic saw its shipments increase 2.4%, 3MMT y/y, with 2.24Mt of cement consumed in the three months ending November. The West North Central’s cement consumption tumbled 8.1% 3MMT y/y to 2.94Mt. The East South Central cement consumption was down 6.0% 3MMT y/y to 1.33 Mt. New England’s three month volume was 0.71Mt, rising 0.8%, 3MMT y/y.
Figure 3 illustrates the census regions historic growth from 2004 to present. The two volume leading regions include the West South Central (19.2% of total US shipments year to date), and the South Atlantic (17.1% of US total shipments year to date). The South Atlantic region had been trending steadily higher since the recession ended but has peaked and is now trending in a downward direction year to date. The West South Central after falling through most of 2016, has reversed course and has been trending higher throughout 2017. The third largest consuming region over the past three months was the East North Central with 14.5% of total cement shipments. The Pacific region ranked the next largest with 13.9%. After declining during the early months of the year, the Pacific regions trend line has reversed direction and has been trending higher. The West North Central zone claimed 10.4% of total cement shipments, while the Mountain zone accounted for 9.7%. The Middle Atlantic represented for 7.9% of national shipments, while the East South Central at 4.7% and New England at 2.5% made-up the remainder.
Referencing the Portland Cement Association, (PCA) website, PCA states that PCA expects cement consumption to rise over the next several years as a function of sustained economic growth. With the additional stimulus from the recently signed tax reform bill and possible infrastructure legislation, there may well be an upside to this forecast. “Taking into consideration the positives of infrastructure spending and the potential offsets of higher interest rates, PCA’s baseline scenario suggests cement consumption reaches 112.7 million metric tons in 2021. Lacking any market or policy reaction by the Federal Reserve, even the most optimistic tax reform and most aggressive infrastructure spending initiatives suggest that cement consumption could reach as high as 128 million metric tons by 2021”.
At Gerdau we routinely monitor Portland cement shipments because of its strong relationship to the consumption of rebar and because cement shipments give an excellent on how the overall construction, (infrastructure, residential and non-residential buildings), market is performing. Portland cement shipment data comes from the United States Geological Survey (USGS). Shipment data is two months in arrears.