A shortage of cement has the construction industry coveting the powdery material mixed with gravel to make concrete as if it were a precious metal.
The national strain on the cement supply started three years ago when low interest rates and economic growth fueled unparalleled homebuilding and construction.
Until recently, Colorado was considered one of the lucky states – home to two major cement manufacturing facilities. As recently as November 2004, Colorado was listed by industry researchers at the Portland Cement Association as not experiencing the shortage that was affecting 35 other states.
But times have changed.
At this month’s meeting of the El Paso County Contractors Association, more than 60 construction company representatives turned out to voice their growing frustration with partial allocations and rationed materials.
Tom Urbina, marketing manager for cement manufacturer Holcim Inc. told the association that one reason for the local shortage was that two kilns at the plant in Florence had to be shut down for repairs. Holcim provides as much as 90 percent of the cement to large users in the Pikes Peak region.
Holcim’s downtime coincided with production problems at other plants, limiting production and creating competition for cement.
Loren Moreland, a construction manager for Classic Homes with responsibility for concrete management, said the shortage affected his crews for two or three weeks, but the situation is improving.
“We buy concrete from different vendors, and they’ve all had up to a 50 percent shortage of powder,” he said.
Ready-mix companies had supplied the company up to 26 truckloads a day – enough for as many homes. Then equipment maintenance and downtime triggered a cutback in supply.
To compensate, Moreland’s crews cut new home foundation pours from 16 a week to about a dozen over two weeks.
J.E. Dunn Construction and G.E. Johnson Construction have been able to get the cement they need for most jobs. But representatives of both companies said that there is seldom any extra.
Mike Harms, vice president of G.E. Johnson, said that his company’s size and buying power has protected it from shortage-related problems on major jobs like the new El Paso County Judicial Building.
“But the impact is being felt by all of us,” he said.
Brad Schenck, senior project manager with J.E. Dunn, said his company has been able to secure the cement it needs for the Memorial Hospital North project, but the future looks challenging.
Both Harms and Schenck said construction prices could begin rising to compensate for the cement shortage.
Mid-sized companies also are facing challenges because of the shortfall.
Vince Colarelli of Colarelli Construction said the lack of cement forced his team to reschedule work on a veterinary hospital.
“We intended to pour slab on grade and then start steel erection,” he said. “Because we had to wait on concrete, we worked on the building’s interior first.”
Paul Kleinschmidt, sales manager for Rocky Mountain Pre-Mix, said the situation should improve by year end based on information from producers. He estimated it will take at least two months to catch up with demand.
In the short term, local ready mix or “batch” concrete companies have tried to accommodate customers’ needs by importing cement from Mexico, but it comes at a premium price, spurred by 55 percent tariffs upon entering the United States.
Contractors predict that job estimates could include clauses that advise clients about cost surcharges for materials.
“Good planning will help,” Colarelli said, “but supply shortages will still affect the bottom line.”