Total shipments of Portland and blended cement, including imports, in the US and Puerto Rico amounted to 5.886Mt in the first month of 2024, down 14.3 per cent YoY from the 6.872Mt recorded in January 2023, according to the US Geological Survey (USGS).
Of the total blended volume reported, 2.745Mt, or 98 per cent, was estimated to be Portland limestone cement.
The key destination for Portland cement shipments was California after a jump of 23.9 per cent YoY to 592,269t. Followed by Texas, despite a 30.7 per cent contraction to 584,277t. Shipments to Florida were down 9.1 per cent YoY to 423,797t.
Masonry cement shipments amounted to 164,627t, down 10.8 per cent YoY, with Florida accounting for almost one-third of shipments at 52,908t, though this is a 1.2 per cent YoY decline from January 2023.
Clinker production, excluding Puerto Rico, saw a 20.3 per cent decline in the first month of the year to 4.804Mt, down 6.024Mt a year earlier. Texas was the key producer despite a 33.6 per cent YoY contraction to 638,080t. Then Missouri, amounting to 570,045t, though this was a decline of 26.8 per cent YoY, followed closely by California at 564,548t, a 16.6 per cent YoY increase on January 2023.
Hydraulic cement, including white cement, and clinker imports amounted to 1.839Mt a decline of 15.9 per cent YoY. Turkey was the key importer amounting to 398,561t, followed by Vietnam (327,535t), Canada (258,943t) and Mexico (146,435t). Turkey was the key importer of white cement (129,899t) and Algeria the key importer of clinker (40,765t). Of total imports, Portland and blended imports were 1.255Mt, representing a decline of 4.8 per cent YoY.
Outlook
The US cement market has faced a tough start to 2024, adding to the difficulties of 2023 when cement consumption contracted 2.8 per cent YoY to total 105Mt. A modest expansion in cement demand is forecast for 2024, driven largely by infrastructure construction. In 2023, non-residential building spending jumped 19.8 per cent YoY and structures investment grew 13.2 per cent YoY, boosted by the government’s Infrastructure Investment and Jobs Act. Of the US$1.2 trn package roughly US$550 bil is earmarked directly for new projects and the US Portland Cement Association estimates the deal will add 46Mt to cement consumption over its five-year time span.
By contrast, lingering residential construction concerns will remain a key drag on cement demand in 2024. Residential investment grew 13.9 per cent YoY in the first quarter, according to data from the US Bureau of Economic Analysis. Nevertheless, in dollar terms levels are still well below those seen two years ago. Furthermore, house starts fell 8.3 per cent YoY in 2023, with new permits down 12.3 per cent YoY.
The ongoing effect of elevated interest rates is curbing household purchasing power and weighing on consumer confidence. The University of Michigan consumer sentiment indicator fell to 77.9 in April 2024 from 79.4 in March amid worries about lingering inflationary pressures. Inflation was 3.5 per cent in March, up from 3.2 per cent a month earlier, and above the Federal Reserve Bank’s 2 per cent target. Meanwhile, the Fed has held interest rates at a 30-year high of 5.25 per cent to 5.5 per cent since July 2023 and options markets have priced in a one in five chance that interest rates will increase within the next 12 months. Adding to housing affordability woes, the S&P Case-Shiller home price index shows residential property prices were up 6 per cent YoY in the first month of 2024.
An economic slowdown is a further downside risk to the cement market in 2024. The latest data show GDP growth cooled to 1.6 per cent in the first quarter of 2024 from 3.4 per cent in the final three months of 2023. Private consumption, a key contributor to the economy, eased to report growth of 2.5 per cent YoY, down from 3.3 per cent YoY previously.
