Cement prices have been rising for a while. In 2007, the price of cement in the United States was $1.50 per bag of cement. By 2014, it had risen to $2.60 per bag. That’s a lot of money, and it will cost a lot more in the future.
The main reason is that it is hard to find enough cement to meet demand.
Cement prices are rising because of the global economy, not because of anything special about cement.
“Cement price in the world has been increasing and is one of the main factors driving the cost of construction all around the world. Cement, which has been historically a commodity and a product that is heavily price-driven, is now becoming more of an input into a facility rather than an output.”
The data are in. The cement price is up. Lots of factors are responsible for the increase, but one of them is the fact that the big users are building more than they used to. This has been happening for a while and as a result the market has had to adjust. The question is how long it will take to return to normal.
Cement prices were going up before I started this blog, but my interest was on prices over time, not on trends in individual cities. When I started this blog was in early 2009 and I worried about Detroit’s economy, not where I am living now. My roots are in Detroit, so I could get a sense of what it is like there by looking at its cement prices relative to other cities’. That wasn’t very helpful because Detroit’s prices were up and down all the time before 2009; you couldn’t tell much from an average over time. When prices started going up again there was nothing left to compare it with.”
The price of cement has risen steadily for the past 18 years. In 2000, the price of cement in the United States was $0.96 per bag. Last year the price was $2.90 per bag, an increase of about 150 percent.
The price of cement is increasing because it is a commodity product. Commodity prices are determined by supply and demand; if there’s a lot of demand, the price goes up. If there’s a lot of supply, the price goes down. Since most concrete is produced in one location, cement production can be managed relatively easily, and it can be controlled through government regulations or by controlling who gets access to resources such as sand and limestone.
Cement prices can also be affected by other factors such as interest rates, fuel prices and weather conditions, but how those factors affect cement prices depends on how they are used to determine the price of cement.
In the US, I would guess that the average person spends more than $50 a year on cement, and the price has been going up steadily for some time.
In the UK, it is not so bad. The average Brit probably spends less than $20 a year on cement. But there is no way of knowing how much money you spend on cement because there is no standard unit of measurement. There isn’t even an industry standard unit. This makes it very hard to compare prices and make sense of them for consumers.
In the United States, cement has been more expensive than it is today for a very long time. For example, in 1818 the price of Portland cement was $3.50 per ton and the price of limestone was $1.50 per ton. That’s how much money a person could buy with a ton of Portland cement or limestone in New York at that time.
By 1873 the average price of Portland cement had risen to $7 per ton, and by 1919 it had reached $20 per ton. And yet in the second half of that century, as the number of buildings increased, the amount of cement needed to build them grew faster than ever before.
The costs are rising due to one or more factors: energy costs; labor costs; interest rates on borrowed money; changes in consumer tastes; and so on.
But another factor is also important: The economies of scale that exist in the cement industry have kept costs down over time, even as demand has grown rapidly. In other words, because we have so many cement plants and factories around the country, what one company pays for materials can be passed on to all those companies without much variation in price across plants.
Because they are so useful, cement is a natural topic for new research. There are lots of sources of cement: there’s the sand and limestone quarried in the U.S., Canada, India and elsewhere; there’s the shale gas that has been flared off in North Dakota; there are also sources of limestone derived from other rocks.
But as with everything else, making cement is a lot more complicated than it looks. The basic materials can be readily available; but once you get to the extraction process, things start to get tricky. What makes a high-quality concrete? It all depends on the kind of cement and on how it is mixed and poured. The way concrete ages and how it performs depends on many factors that vary from place to place: water quality, atmospheric conditions, local weather patterns (which determine whether or not there will be any rain), even something as simple as whether it is made by a dry or wet process.
There are literally thousands of different kinds of cement going into all kinds of products in all kinds of climates around the world. And when you start talking about thousands of different projects using thousands of different kinds of cement in almost every corner of the planet, prices tend to rise because supply can’t keep up with demand.