According to NSSGA, congress agreed to an emergency supplemental appropriations bill on May 25 which the president quickly signed. The Senate approved the $120 billion bill by an 80-14 vote after the House passed it earlier. Of specific interest to the aggregates industry are transportation related provisions in the domestic spending portion of the bill. The final package contains $871 million, up from $682 million contained in an earlier version, in supplemental spending for the Federal Highway Administration’s emergency relief program. Despite opposition of House Transportation and Infrastructure committee Chairman James Oberstar (D-Minn.) and senior Republican John Mica (R-Fla.), the new emergency relief money is offset by an equivalent $871 million rescission of highway contract authority balances held by states. The offset is unnecessary because emergency response money is designated as an off-budget emergency and does not need an offset. Your comment?

Price increases slow

According to Reed Construction Data’s latest Construction Materials Costs report, price increases have begun to slow. Aggregates prices rose only 0.6 percent over last month, against 2.9 percent over three months ago, and 9.2 percent over a year ago. That’s a far cry from the the whopping 26.3 percent over three years ago. Cement, asphalt and concrete follow a similar pattern, although concrete prices actually declined over last month. Your comment?

Cat growls louder

On May 21-22, Caterpillar held a press briefing in Peoria, Il., to introduce to the trade press a number of new equipment advancements and innovations. Pit & Quarry was of course on hand, with myself (see photo) and Senior Editor Brian Richesson in attendance. Of note to aggregates producers was the new 320D L, 320D LRR, and 321D LCR tracked excavators. We were of course treated like royalty by Cat's Sharon Holling and Johnny Campos. Look for more on these products in coming issues of Pit & Quarry. Your comment?

Materials prices rise

Concrete prices in April experienced no change, according to the Bureau of Labor Statistics Producer Price Index. Steel and asphalt continued to post the largest monthly price increases among building materials in April 2007. Steel prices grew by 4.4 percent from March to April and asphalt prices were up 1.2 percent for the month. According to the spring PCA Cement and Construction Forecast, the relative price improvements of concrete compared to other materials that materialized during the fourth quarter of 2006 and has continued through recent data collections, will increase national cement intensity in 2007. Cement intensity refers to the tons of cement per dollar of construction activity. During the past year, steel prices have increased 17.1 percent, asphalt prices, led by increasing oil prices, rose 16 percent while concrete has seen a relatively modest increase during the last year of 4.6 percent. Lumber prices from 2006 to 2007 have declined by 11 percent. Your comment?

HeidelbergCement buys Hanson

HeidelbergCement AG, Germany's largest cement maker, has agreed to buy Hanson Plc of the U.K. for $16 billion) in the global building-materials industry's biggest-ever takeover. The deal allows HeidelbergCement, controlled by German billionaire Adolf Merkle, to increase revenue by two-thirds, expand in the U.S. and bolster output of aggregates, as wellas pipes and bricks. The Heidelberg-based company employs 46,000 people in more than 50 countries and gets almost half its revenue from Europe, with cement accounting for 50 percent of production. Hanson has 26,000 workers in 14 nations and derives half its sales from North America, with 69 percent of output from aggregates.

Infrastructure emergency

The Urban Land Institute (ULI) and the accounting firm of Ernst & Young have just published "Infrastructure 2007: A Global Perspective." The study finds that the U.S. faces a $1.6 trillion deficit in needed infrastructure spending for transportation, energy, water and wastewater through 2010 just for repair and maintenance. In addition, poor road conditions led directly to $54 billion in needed car repairs annually. Included in the study is a survey of state departments of transportation planning directors that finds only 44 percent responding that their transportation infrastructure "meets most" of current needs while 50 percent say that it "meets some" and another 6 percent says it "does not meet most." Things worsen when it comes to the states’ 10-year plans, where 80 percent of respondents indicate those plans will "not meet needs" for future transport networks. The report concludes according to the data, "At some point, the system is going to grind to a halt." The study examines trends in infrastructure and financing, ranging from the initiation of the interstate highway system through today, and looks ahead toward finding new models for both in order to avert an infrastructure crisis. Your comment?

Mining Law of 1872

That pesky Mining Law of 1872 is back in the news. House Natural Resources Chairman Nick Rahall (D-W.Va.) is once again seeking to overhaul the General Mining Law of 1872. According to a recap on Resources Investor, Rahall's new bill would impose an 8 percent royalty on cerain minerals taken from public lands. In addition, It would establish an environmental standard for mining on federal land and require companies to have an operations plan, a reclamation plan and evidence of financial assurances to carry them out. It would limit an operations permit to 10 years, subject to renewal, and mandate that land be restored to a condition capable of prior uses. The bill also would establish a fund to reclaim land and water resources affected by past mining and a fund to assist mining communities. It would set forth inspection and enforcement requirements and allow citizen lawsuits to enforce them. The bill also identifies categories of federal lands off-limits to mining. Your comment?

Production heads south!!!

USGS just announced full-year 2006 production numbers, and the totals are shockingly off. An estimated 643 million tons of total aggregates (crushed stone, sand, and gravel combined) was produced and shipped for consumption in the United States in the fourth quarter of 2006, compared with 735 million tons in the same period of 2005. Crushed stone was off 12.9 percent, while sand and gravel was off 10.5 percent. The estimated 2006 total annual production of aggregates produced for consumption was 2.69 billion tons, a decrease of 9.1 percent compared with that of 2005. Third-quarter numbers were off slightly from the year previous, and fourth-quarter predictions called for more of the same, but harsh weather in some parts of the country killed off production early, resulting in a larger than expected decrease. That weather continued into the first quarter of the year, which suggests that first-quarter 2007 production could take a hit as well. Your comment?

Hanson a target?

HeidelbergCement AG, Germany's biggest cement maker, said it may offer to buy Hanson Plc, one of the world's largest suppliers of crushed stone. Hanson stock surged 20 percent, giving a market value $14.6 billion. "HeidelbergCement is currently reviewing its options with respect to its interest in Hanson, including the possibility of seeking to acquire the company,'' the Heidelberg, Germany-based company said in a statement. What would HeidelbergCement stand to gain? Acquiring Hanson would boost the company's revenue by more than two-thirds, add operations in Australia and bolster its range of products such as crushed rock, concrete pipes and bricks. The German company, which gets about half its sales from cement, has already expanded in Asia and eastern Europe to counter a decade-long construction slump at home. The deal makes sense on paper, but is it do-able? Some experts says it's possible, some say it's all talk. Your comment?

Lafarge surges

Lafarge is reporting that net profit in the first quarter was up substantially and ahead of its estimate. In a statement, the company said good first-quarter trends confirmed its view that markets will be good in 2007, and predicted that full-year results will exceed those of last year. Sales growth was sustained in most markets, and while volumes were down in North America, current operating profit was up due to price increases and cost cuts. Lafarge said it expects strong demand and prices for cement through 2007, but sees a slight slowdown in North America. Your comment?