Surging Material Costs Hit Construction Budgets Hard
Surging prices for diesel fuel, asphalt, steel and other materials are taking their toll on construction budgets, according to Ken Simonson, chief economist for the Associated General Contractors of America (AGC), who was commenting on the producer price index (PPI) for June reported by the Bureau of Labor Statistics.
The PPI for inputs to construction industries—materials used in all types of construction plus items consumed by contractors, such as diesel fuel—surged 10.4 percent over the past year. The index for highway and street construction increased 18.9 percent.
"Bad as those figures sound, the increases in asphalt and steel costs have been even worse since these prices were collected in mid-June," Simonson says. "In the first two weeks of July, asphalt prices have jumped by 40 percent in several parts of the country. Prices for rebar—steel used to reinforce concrete in highways, bridges and buildings—soared $200 per ton."
Regarding diesel fuel, the Energy Information Administration has reported that the average price of highway diesel hit a new record of $4.76 per gallon in mid-July, up 12 cents from just two weeks prior. "These figures won’t show up in the PPI until next month, but contractors are paying them now," Simonson notes.
"Suppliers have been announcing price increases for many other products as well," Simonson adds. "Yesterday, two gypsum makers told contractors that wallboard prices would rise at double-digit rates in each of the next three months."
In the futures markets, aluminum has been setting records, while natural gas has doubled in price from a year ago. That has triggered jumps in the cost of construction plastics—such as polyvinyl chloride pipe, insulation and flooring—that use natural gas as a feedstock.
"Unless Congress passes additional funding in the next few weeks to keep highway construction funds flowing, many states will stop awarding contracts," Simonson warns. "Other public agencies, as well as private owners, must adjust their budgets promptly to reflect the new price realities for construction."
More information is available at http://www.agc.org
Airport Runways Stay On Premises
ReCrete Materials Inc. of Arvada, Colo., hosted Denver media in late July to show off the company’s use of recycled concrete in ready-mix uses and a tilt-up construction application.
The materials company worked with Etkin Johnson Group, general contractor Murray and Stafford Inc., concrete contractor CAL Construction Inc. and Forest City Development in using ReCrete’s ready-mix concrete made from the former airport’s recycled runways to create tilt-up panels for the office and industrial development known as Enterprise Park at Stapleton.
According to the Tilt-Up Concrete Association, the 1,570 tons of recycled concrete used on this project is the largest ever use of recycled concrete in a tilt-up application. "The current perception that recycled products may only be used for lower end uses is obsolete," states ReCrete President Jason Buesing.
Recycled aggregates (concrete and asphalt) have been used in ready-mix concrete for many years, but mostly on an experimental level or with limited industry dedication or success, according to Buesing. "ReCrete spent several months in the laboratory developing the mix designs that we use today," says ReCrete vice president of sales and marketing, Jay Hock, a 25-year veteran of Colorado’s concrete industry. "Now, through this project and others, we are changing people’s perception of recycled aggregate."
The Stapleton project has had a recycling focus from the start, thanks in part to the work of fellow Arvada, Colo., company Recycled Materials Co. Inc. (See "The Urban Quarry," a feature from 2002.)
Etkin Johnson Group, plans to seek LEED (the U.S. Green Building Council’s Leadership in Energy and Environmental Design) certification for this portion of the Stapleton project, which includes three buildings with 441,000 square feet of office and industrial space within the Stapleton Redevelopment. The decision to use recycled concrete for the project was based on several factors. "The material was readily available at nominal additional costs, it meets our quality standards and using it has positive environmental impacts," says Jim Vasbinder, vice president of development for Etkin Johnson Group.
Projects to date for ReCrete Materials Inc. have included work for a client list that includes the City and County of Denver, City of Thornton, City of Arvada, the Town of Golden and numerous Colorado residential and construction firms.
Using concrete debris from Denver’s former airport as well as from various local demolition projects qualifies for critical pre-consumer and post-consumer LEED points versus traditional mix designs or designs using only fly ash, the company points out. More information on ReCrete Materials Inc. can be found at www.recretematerials.com.
More information about Recycled Materials Co. Inc. is also available online by visiting the company’s Web site www.rmci-usa.com.
California City Awarded Grants to use Recycled Tires
The California Integrated Waste Management Board (CIWMB) has that it has awarded $300,000 in grant funding that will go to resurfacing roads in Chino, Calif., with material made from scrap rubber from recycled tires, according to a report in the Daily Bulletin (Ontario, Calif.).
The two state grants will fund the use of rubberized asphalt concrete as part of a statewide initiative to recycle used tires.
According to the report, the rubberized surfacing will be used on about four miles of road. City officials estimate that resurfacing one mile of one lane will use approximately 2,000 scrap tires.
The California Integrated Waste Management Board is the state agency designated to oversee, manage, and track California’s 92 million tons of waste generated each year. More information on the CIWBM and its initiatives is available online by visiting its Web site www.ciwmb.ca.gov.
CEMEX Announces Ready-Mix Concrete Price Increase
CEMEX Inc., Houston, has announced that because of escalating fuel prices, the company will increase concrete prices $25 per cubic yard effective Oct. 1.Fuel prices have increased 107 percent since December 2006, according to a press release from CEMEX. The cost of fuel has affected two key components of CEMEX’s operations cost—the cost of raw materials and delivery.
While ready-mix concrete prices have dropped, rising energy costs have significantly driven up other building materials since December 2006: steel prices are up 39 percent, aggregate prices are up 13 percent, and asphalt prices are up 17 percent and rising steadily.
To give time for customers to prepare for the increase, CEMEX will begin quoting the new prices on Oct. 1. All written quotes prior to that date will not include the $25 increase and will continue to be subject to fuel surcharges for the duration of the project. CEMEX will honor previous written contracts.
USA Gypsum Releases New Recycled Product
USA Gypsum has released a new product, granular gypsum, which consists of 100 percent recycled drywall and is a soil conditioner for farm or home use.New features of granular gypsum, compared to other gypsum products, include low dust content and free flowing qualities. It can be applied with any type of fertilizer spreader.
The drywall scraps used in recycling are gathered from new construction projects. The company offers on-site roll-off container service for the customer’s convenience.
USA Gypsum, which is headquartered in Reinholds, Pa., recycles scrap drywall materials from manufactured housing and construction industries into products that are marketed under the USA Gypsum trademark. In addition to gypsum, products include compost and soil and animal bedding.
More information is available online at www.usagypsum.com.
Texas County Landfill to Recycle Roofing Shingles
Williamson County (Texas) Landfill has announced plans to introduce equipment that will allow it to recycle roofing shingles, according to a report from KVUE-TV, Austin, Texas.Approximately 100 tons of roofing shingles go into the landfill per day, according to the report.
The machine melts the shingles, which are then sent to a grinder. The resulting material could be used for pavement or in the production of new roofing shingles, according to the report.
Waste Management, which operates the landfill, is also working to install a construction and demolition debris recycling system in Williamson County that will separate mixed C&D debris, including concrete, metal, wood and sheetrock.
Pending state approval, both machines should be operating by September.
More information is available online by visiting www.wilco.org.
East Texas Considers Wood- Burning Power Plant
The Austin City Council was scheduled to vote on a proposed wood-burning power plant in East Texas in August, according to a report in The Morning Telegraph (Tyler, Texas).
Development of the $300 million facility could begin in 2009 if Austin approves a 20-year, $2.3 billion energy purchase agreement from the project developers—Energy Management Inc. and BayCorp Holdings through their joint venture Nacogdoches Power LLC.
The plant would be located near the town of Sacul, Texas. It would be the second facility using scrap wood to produce energy being developed in East Texas. According to the report, construction is scheduled to begin on a $100 million plant near Lufkin, Texas, in September. That project is being developed by Aspen Power LLC.
The plant could be fueled by any type of wood product, including forest residue, mill residue, urban debris and whole trees. Operation of the plant would require a million green tons of fuel per year.
Asphalt Shortage Halts Roadwork in Washington County
A shortage of liquid asphalt has reduced planned chipsealing projects on roads in Pierce County, Wash., according to a report in the Tacoma Daily News (Tacoma, Wash.).The product became unavailable because of a sudden halt in manufacturing at the Tesoro refinery in Anacortes, Wash. According to the report, Tesoro was the primary supplier for Albina Asphalt Products, which served as the sole supplier for Pierce County.
Nearly all of Pierce County’s 3,100 lane miles of roads are made of asphalt and require preservation with asphalt based materials, according to the report.
Available alternatives to liquid asphalt include recycled asphalt and sealer made from recycled tires. While these products cannot be directly substituted for chipsealing, road maintenance crews will be able to used recycled products for other road repair projects, including surface sealing, crack filling and patching, according to the report. C&DR
Explore the October 2008 Issue
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