Lt. Darren Orr
Hawaiian Cement and HC&D have alerted customers to prepare for a potential price increase in 2023 of anywhere from 20% to 35% per cubic yard for ready-mix concrete. Talk about supply chain challenges!
“This will adversely impact everyone in the construction industry, particularly those contractors who have already bid on projects starting in 2023 using the current pricing of concrete,” says Cheryl Walthall, executive director at General Contractors Association (GCA) of Hawaii.
Darren Orr, cement sales manager at Hawaiian Cement, says that the brokers in the Asia cement industry attribute it to the price and availability of coal. “About 95% of cement produced in Asia are from kilns fueled by coal,” Orr says. “In the U.S., the cement industry mostly uses natural gas or other fuels for production. Asia doesn’t have that luxury.”
Orr says Hawaiian Cement purchases its cement from Taiwan. “We are looking for other sources with independent coal resources, and we are looking at alternatives for purchasing cement. Everyone is feeling the pain down there.”
Taiwan imports its coal from Australia. In 2016, Australia supplied 64 percent of thermal coal and 75% coking coal to Taiwan. Of Taiwan’s energy import portfolio, coal leads at 45%, compared to 31% for liquid natural gas, 14% for nuclear energy, 5% for oil, 4% for renewals and 1% for pumped hydro energy. That’s according to the Australian Trade and Investment Commission.
The five biggest exporters of coal are Australia, Indonesia, Russia, United States and South Africa. Combined, those five countries shipped 84.5% of the total value of coal sold on international markets during 2021.
In 2021, coal exported from Oceania (mostly Australia but also from New Zealand) amounted to $32.7 billion, or 39.7% of worldwide coal sales. Asian exporters generated 22%, trailed by European suppliers at 17% and North American suppliers at 11%, according to World Stop Exports.
“Hawaii is a really interesting market,” Orr says. “Fortunately, or unfortunately, we are the only suppliers of cement to a wide range of concrete producers here, who all have to produce concrete that meets American Society for Testing and Materials (ASTM) standards.” In other words, concrete for buildings and infrastructure needs to be safe and sturdy for a long time. On the GCA of Hawaii website, Walthall posted, “GCA committees that involve government agencies will be having discussions with our agency partners to try to navigate these unanticipated price escalations. You are welcome and encouraged to get involved and share your concerns at any of our committee meetings.” Please contact Gladys Hagemann if you’re interested. “In the meantime, we encourage you to start having discussions with clients on projects that will be affected,” Walthall says.
