Presentation on theme: "Construction Capacity: Aggregate and Cement Production Construction Capacity: Aggregate and Cement Production Katie Shattuck9 March2010."— Presentation transcript:
Construction Capacity: Aggregate and Cement Production Construction Capacity: Aggregate and Cement Production Katie Shattuck9 March2010
Aggregate Supply Note: *China production is divided by 10 for scale Source: USGS ; European Aggregates Industry; UN data 1. Use aggregate data from country specific geological surveys (non-UN data) 2. Otherwise, cement used as a proxy 3. If neither is available, use UN data Total: 34.7B The historic maximum global production of aggregate is 34.7B. However, using JP Morgan’s cement forecast, we will need 65.9B tons of aggregate in 2025.
Aggregate Supply Bottlenecks Permitting: Regulations restrict the output of aggregate even in aggregate rich areas Reserve Shortage: Certain geographies will run out of aggregate reserves in <50 years Transportation: High bulk weight and low unit volume makes aggregate costly to transport. In California, transporting aggregate can cost $0.15 / ton per mile. Transporting aggregate 30 miles would consequently cost $4.50 / per ton. Prices: Aggregate prices vary widely by region due to the local nature of aggregate demand, in California we see a range of $7-22 per ton. Resource Competition: Construction generally rises with GDP growth. As global GDPs continue to rise, sea ports will need to compete with other construction projects for aggregate.
Cement Supply Bottlenecks Resource Competition: Construction generally rises with GDP growth. As global GDPs continue to rise, sea ports will need to compete with other construction projects for cement. Energy Requirements: Energy costs represents 32% of cement manufacturing costs and 15% of cement’s total selling price. Cement manufactures are reducing their energy consumption, but energy will increasingly be considered a scarce resource. Region CAGR (2010-2025E) Western Europe1.5% North America2.0% Australia1.0% Japan0.0% Eastern Europe3.0% Latin America2.0% Asia Ex-China6.7% China3.0% Middle East3.0% Africa5.0% Total 3.6% Sector CAGR (2010-2025E) Transportation 0.3% Industrial 1.1% Commercial 0.9% Residential 0.7% Total 0.8% Cement Demand GrowthUS Energy Demand Growth
Cement and Aggregate are a key component of a sea barrier Long Beach Port Example In the Long Beach example, we need 12.021 million m 3 of concrete, or 424.518 million ft 3. With the above 20’ x 12’ x 1’ wall unit, we would need 1.7 million units. Concrete UseVolume Required ( m3 )Implied Aggregate Required Dyke Foundation Material9,570,0808,905,491 Dyke Core Material2,451,0002,280,792 Reinforced Concrete includes footing & tie backs, 12’ High Seawall MaterialLaborEquipment Total including Overhead & Profit Min.$126$179$29$445 Max.$146$193$31.50$490 Note: RS Means estimates the price of the base costs of materials, instillation, overhead and 10% profit. These estimates do not include items such as tax, insurance, overtime, consulting fees, quality assurance and environmental protection. Source: RS Means This translates to a cost of $787 - $866 million for concrete material and installation alone