Cement shortage may affect concrete supply.
To date, only a handful of states which rely on imported cement--including Florida and California--have felt the pinch, with the New York area remaining unaffected by the shortage.
However, last month, Joseph J. Ferrara, of Ferrara Bros., one of the largest New York suppliers of concrete, received a letter from a cement company saying there may be future rationing of the compound.
"The shortage has recently started to affect New York," said Ferrara. "We been told we may be put on allocation. It could be any day now. They just forewarned, but it's not like we are going to be out and nobodies going to be able to get concrete."
About 20 to 25 percent of the U.S. cement supply is imported. New York may not have noticed the shortage, because concrete producers use primarily domestic cement, said Ferrara.
But should US construction continue to enjoy its boom and demand for cement among Pacific Rim countries continue to increase, domestic cement producers say the supply may be in jeopardy.
"The cement business is a cyclical industry," said Liz Mikols, a spokesperson for Lehigh Cement Company, the fifth largest cement producer in the United States and Canada. "Fortunately we have a construction boom in this country. The problem is we can only make so much. We don't have the cement capacity in the United States when the demand is at its peak."
"At this point it's difficult to say what is going to happen," she said. "What we can do is get our customers fair distribution."
There is not an actual shortage of foreign cement, but there is a problem retrieving it.
"Export shipping is at a high, but import shipping has a lower priority," said Mikols. "We have the cement to import. We just need the ships to import it.
The Portland Cement Association agrees.
"There are two root causes for the cement shortage," said PCA chief economist Ed Sullivan in a press release. "Global transportation conditions that hinder the flow of imports, and added demand associated with the ongoing U.S. economic recovery."
Even with a possible cement shortage, contractors shouldn't despair, said Jerry Parnes, president of the Concrete Industry Board, Inc.
When cement is in limited amounts there are substitutes. The two main substitutes for portland cement or supplementary cementitious materials are slag cement and fly-ash, Parries said.
"The predicted cement shortage presents a perfect opportunity for the concrete industry to utilize more mineral admixtures, such as fly-ash and slag, both produced from waste by-products of manufacturing," said Parnes. "Not only do these materials impart many desirable properties in the concrete, but can also add points in the LEEDs concept of producing 'green' environmental friendly products."
According to the Slag Cement Association, slag cement can be used as a replacement up to 50 percent in normal concrete applications, with fly-ash as high as 30 percent.
Although builders haven't been impacted as of yet, there may be a minimal increase in costs to produce concrete at some point, said Frank J. Sciame, chairman of the New York Building Congress.
"It looks like there maybe a 10 percent increase in material cost," said Sciame, president of F.J. Sciami Construction Company, Inc. "But keep in mind the material cost is a small fraction of the in-place cost."
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|Publication:||Real Estate Weekly|
|Date:||Jun 2, 2004|
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