Pit & Quarry, October 2011

Tour takes Ontario association to quarries W S Tyler plant T he Ontario Stone Sand Gravel Association OSSGA held an operations tour last month that included visits to aggregate quarries a construction project and a screening equipment factory The bus tour for OSSGA members visited the Niagara Tunnel project featuring the largest hard rock tunnel boring machine in the world The massive tunnel beneath the City of Niagara Falls will divert water from the Niagara River and carry it downstream to energy generating stations The quarry visits included Walker Aggregates Thoroid Division Nelson Aggregate Co Lincoln Quarry and Vineland Quarries and Crushed Stone The tour stopped for a factory tour and lunch at W S Tyler in St Catharines where the company has a screen media weaving and finishing operation as well as processing equipment assembly AGGREGATES FORECAST Not so drastic changes Compared to the past few years the near term forecasted changes in aggregates demand are small In 2008 09 more than 400 million tons per year of demand collapsed For the next few years the annual changes are likely to be less than 50 million tons As the chart shows the sources of the decline in demand change dramatically from year to year In 2007 08 residential accounted for most of the declines In 2009 nonbuilding was the major cause of the decline in aggregates demand For the 2011 13 period all of the changes are small some up some down During the next two years total demand will be between 19 and 20 billion metric tons Residential demand will increase in 2012 for two reasons Current building levels are so low that basic demographic demand from population growth will create new demand and secondly mortgage rates and home prices are so low that the buying versusrenting BY BRIAN RICHESSON OSSGA members watch an equipment demonstration Change in Aggregates Demand by Segment 400 300 200 100 0 100 200 300 400 500 600 2006 2007 2008 2010 2009 2011 2012 2013 Residential Nonresidential Nonbuilding decision now favors buying Millions Metric Tons Nonresidential demand also will begin to recover in 2012 as even the small employment gains during the last two years are enough along with low financing costs to create some new demand The weak link during the next 18 months is nonbuilding The federal stimulus money is almost gone and states are still struggling to balance their budgets Any new money is probably 18 24 months away from reaching the bidding stage resulting in lower public works for now The total impact of these segment changes is flat aggregates demand through 2012 and small increases in 2013 David Chereb David Chereb has many years of forecasting construction materials He received his Ph D in economics from the University of Southern California He can be reached at dc@ davidcherebgroup com 4 PIT QUARRY October 2011 www pitandquarry com