Although it’s clear from the devastation caused by Hurricane Katrina that materials used in residential and commercial construction will be needed to rebuild, building products companies say it’s too early to tell when they’ll be needed. It’s also unclear whether there will be a spike in demand for some products.
With demand for cement already high because of the residential construction boom, however, Katrina will push that demand even higher, said Ed Sullivan, the chief economist with the Portland Cement Association, a trade association for cement manufacturers.
The association did a study last year that looked at hurricanes from 1972 to 2004 and what they did to cement demand, Sullivan said. For hurricanes classified as category 4 or category 5 - the two strongest of the five categories - cleanup took about five months, and then demand for cement kicks in and lasts for an extended period, he said. How much of a demand there is for cement following a hurricane depends on how populated an affected area is and what construction projects were either underway or planned when the storm hit, Sullivan said.
In addition to demand, the cement manufacturing and transportation is also being affected by Hurricane Katrina. On an annual basis, the U.S. Makes about 75 per cent of the cement it uses, but about 10 per cent of what’s imported comes through the port of New Orleans, Sullivan said.
Of the estimated 130Mt of cement that will be used in the US this year, about 2.5Mt of cement will come through New Orleans and about 500,000t will arrive through Mobile, Alabama, Sullivan said. It’s unclear when those ports will reopen, he added. "It doesn’t take much of a shortfall of cement to cause regional tightness". In my mind, this will have an impact in terms of further tightening supplies not only in Louisiana, Mississippi, Alabama and Texas, but further up the Mississippi River because some of those places are dependent on imports from the port of New Orleans."
