Costs Head North as Cement Shortage Hits the Southwest

Fri July 23, 2004 - West Edition

TUCSON, AZ (AP) Cement –– the vital ingredient in concrete –– is becoming harder to find for everyone from do-it-yourselfers to big contractors.

As a result, home prices in Tucson are rising, as is the cost of road projects, forcing contractors to ration.

Businesses relying on cement to make concrete are especially hurting, said William Hardy, owner of W.J. Hardy Concrete.

“It is absolutely destroying this business,” Hardy told the Tucson Citizen. “There are days I have to tell people to stay home.”

The price of concrete has risen from $64.80 per cubic yard in January to $70 now. Comparatively, a cubic yard of concrete was $35 a decade ago.

Building the typical Tucson home, which requires 100 cubic yards of the material, now costs an additional $3,500.

The federal government’s $57-per-ton tariff imposed on Mexican cement as part of the 1994 North American Free Trade Agreement is contributing to at least part of the shortage. The tariff was meant to protect American firms by preventing Mexican firms from flooding the American market with low-cost cement.

While the Arizona Portland Cement factory just north of Tucson produces millions of tons of concrete a month, it’s not enough, said Craig Starkey, sales manager of Arizona Portland Cement.

“The demand is way higher than our ability to produce,” he said. So Arizona Portland is forced to ration, he added.

Normally, imported cement would make up for the demand Arizona Portland could not meet. But Asian suppliers are putting a priority on China, which now uses 40 percent of the world’s cement supply.

Through May, 3,642 housing construction permits were issued in the Tucson area, up from 3,471 last year.

Tom Doucette, owner of Doucette Homes, said the cement shortage has forced contractors to schedule jobs further in advance.

“You can’t just say, ’Hey, let’s pour a driveway today,’” he said. “You are looking out further to smooth out your demand and accommodate subcontractors.”