During 26 years in the concrete business, Dave Morrell has never seen the supply of cement so tight.
Suppliers have cut the amount available to contractors along the Front Range by up to 50 percent over the past few weeks, said Morrell, president of Concrete Frame Associates in Aurora.
Cement, which is used to make concrete, was in short supply because of an increase in domestic building even before Hurricane Katrina swept away New Orleans. The disaster has further choked availability, causing concerns about price increases and construction delays.
About 12 percent of imported cement enters the country through New Orleans, said Ken Simonson, chief economist with the Associated General Contractors of America.
And a monumental reconstruction effort being planned for the city will require huge amounts of concrete and other materials.
“I think this is going to lead to delays on all kinds of construction products and is going to make the price of concrete higher,” he said.
Holcim Inc. cement plant in Florence began rationing cement – called “allocating” in the industry – three weeks ago. The facility is among the last in the country to begin rationing, said Rob Davies, the plant’s manager.
“Demand is so strong, it has depleted our inventory, and it is higher than we can produce on a weekly basis,” Davies said.
Before Katrina hit Aug. 29, at least 32 states were experiencing a cement shortage, Simonson said.
The shortage is exacerbated by high demand abroad – particularly in Asia and South America – which limits the amount the U.S. can import. The nation’s industry is trying to compete by pressing the U.S. Commerce Department to lift tariffs on Mexican cement imports.
Cement is used to bind sand, stone and water together in concrete.
Suppliers are telling contractors they will be able to meet demand in another month or so, Morrell said.
Morrell’s company is involved in several hospital projects, including the Medical Center of the Rockies in Loveland, which is scheduled to open in 2007.
So far the company, which pours foundations and other concrete infrastructure, hasn’t had to extend schedules for completion of any projects. If the shortages continue, Morrell said, delays will be inevitable – and they could lead to financial losses and short-term layoffs.
“You try to minimize the impact, but there will be delays that will be weeks up to months,” Morrell said.
Morrell said concrete also was rationed during the construction of Denver International Airport in the mid-1990s.
“But I can’t ever remember allocations that have been this significant,” he said.
Staff writer Tom McGhee can be reached at 303-820-1671 or tmcghee@denverpost.com.
