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North America 2019
World Cement
practice throughout the study region, SCMA
has used the lowest common denominator
of a 1.05:1 ratio of ordinary portland cement
to clinker in the calculations. Pending further
evidence of US acceptance of limestone
additions, it may be appropriate to increase
the ratio to 1.1:1 in the future. This would have
the effect of adding over 5 million tpy to the
US supply equation.
Supplementary cementitious materials
(SCMs), such as ground blastfurnace slag,
flyash, and silica fume, are used by virtually
all cement customers in the US, in order to
modify the properties and/or cost profile of
the concrete they sell. Again, this is a practice
that has been well established over several
decades. For the purposes of this study, it is
assumed that the proportionate use of SCMs
in concrete will remain essentially constant
over the forecast horizon, and will therefore
not impact the supply equation. It should
be noted, however, that higher limestone
additions in cement would be partially offset by
lower SCM additions in concrete.
International imports supplement regional
capacity
Historically, any cement shortages in the US
have been addressed not only with cement
from Canada and Mexico, but also with
cement sourced from overseas, usually from
the Euro-Med area and from Asia, where
enormous export capacity exists. In the US,
at least 95% of cement import facilities
are owned by domestic producers, who
use them to supplement North American
capacity in times of shortage, often sourcing
the needed volume from plants in the
Euro‑Med area that are owned or affiliated
with their parent companies. This means that
domestic suppliers take care of customers’
requirements for portland cement in tight
markets, whether there is sufficient dedicated
capacity located in North America or not.
There have also been several instances
where major cement purchasers have opened
their own import facilities. Though such
non‑structural international imports of portland
cement will always be a factor in the US
supply equation, they are otherwise ignored
for the purposes of this analysis.
Production vs capacity
The nameplate capacity calculations provide
a somewhat theoretical or best case view of
what plants could be capable of producing
over time, when well maintained and expertly
managed. In addition, it presumes, for
example, an absence of labour disruptions
and average weather patterns. In reality,
equipment breakdowns, labour problems, and
unpredictable weather make it highly unlikely
that every plant will operate for 330 days in
a given year. Ignoring production decisions
that are taken for market reasons, the likely
maximum achievable production in any year is
considered to be between 2% and 6% below
this best case view.
Total structural capacity
Table 2 summarises the conclusions of
SCMA’s US supply analysis. It suggests that
the US industry has capacity to produce up
to 110.5 million tpy of portland cement and
should be able to reliably achieve production
of between 104 million tpy and 108 million tpy.
Conclusion
SCMA’s analysis shows that US portland
cement demand will remain below US
dedicated supply over most of the forecast
horizon. As 2023 nears, demand will finally
approach practical supply levels. However,
under the scenario where 5% additional
limestone addition adds roughly another
5 million tpy to the supply equation, overall US
demand will still fall well short of supply.
About the authors
Dr David Cherub has over 30 years of
experience forecasting North American
construction materials markets. He is
Chief Economist at SC Market Analytics and
has provided specialised economic and market
forecasting services to the cement, concrete,
and aggregates industries since 1996.
Colin Sutherland has over 30 years of experience
in the construction materials sector, primarily
for cement, aggregates, and concrete products.
His areas of expertise include corporate strategy
development, market/competitive analysis,
demand forecasting, and business case
development for large CAPEX projects.
Table 2. Estimated US structural supply (t).
Nameplate US-based
capacity
102 650 000
Dedicated Canadian and
Mexican capacity
7 850 000
Nameplate structural total
110 500 000
Production ~ 94%
103 870 000
Production ~ 96%
106 080 000
Production ~ 98%
108 290 000