Shipments are said to be the highest in 26 years, but construction has stopped because there is no concrete, why the hell?

Money Today Reporter Seongjin Kim | 2023.04.01 10:30

Remicon plant. /Photo courtesy of Seoul City

Concrete is not accepted on construction sites across the country. The ready-mixed concrete industry, which produces concrete, raises the problem that the supply of cement, which is a raw material, is slow. The cement industry notes that demand has increased more than expected, and that the cement produced has not been properly distributed.

An official from the ready-mixed concrete industry, who requested anonymity, said on the 2nd, “We are shipping 20 to 30% less than the construction company’s order.” Remicon is concrete prepared by mixing cement with water to harden immediately on the construction site.

Concrete is an essential building material that is needed to make the floor and frame of a building, the so-called ‘frame’. Construction sites across the country do not accept such concrete. When the Korea Construction Association surveyed medium and large companies within the top 100, 63.6% of the construction sites did not have any concrete, so construction was stopped or delayed. Among the 200 construction sites in the metropolitan area surveyed by the Seogyeongin Reinforced Concrete Users Association (Seoul, Gyeonggi, and Incheon), 92 (46%) also reported that there was an obstruction in construction.

Traditionally, January to April is a period when concrete is scarce. This is because it is a warm building season. Incidentally, the concrete and ready-mix construction industry says this year’s supply shortage problem is “different”. A lack of ‘cement’, which is the raw material of concrete, is identified as the cause. There are also the experiences of truck drivers who say that bulk concrete trucks (BCT) carrying cement have to wait 11 to 12 hours to receive cement.

An official from the small and medium ready mixed concrete industry said, “In the metropolitan area, cement supply is 50% less than in previous years, and the situation is better in the states, so there are 30-40 % scarcity.”

However, the cement industry, after examining 7 domestic cement companies, estimates that cement production in the first quarter of this year was 10.51 million tonnes and demand was 10.43 million tonnes. Production exceeds demand. This is the highest level since the International Monetary Fund (IMF) economic crisis. The industry estimates that there is a problem with the distribution of concrete between private and public construction sites, large and small.

The industry also cites ‘increased demand’ as the cause. Demand for cement in the first quarter of last year was 9.87 million tonnes. It was 560,000 tonnes (5.3%) less than this year. There are two reasons for this increase in demand. First, the work was delayed. At the end of last year, the Korea Cargo Solidarity refused to transport ready-mixed cement and concrete, so the construction work that had to be done in the fall is being done in the relatively warm last winter and this spring.

Here, the amount of cement required to produce the same amount of concrete has increased. Last year, the concrete strength standard was strengthened due to a collapse accident at the construction site of an apartment building in Gwangju. The amount of cement required to produce 1㎥ of ready-mixed concrete (Lube) has increased from approximately 250kg to 280kg.

Some speculate that cement production has fallen due to winter maintenance of the ‘kiln’ cement production facility and environmental renovations in line with the government’s carbon neutral road map. As of today, the cement industry operates 35 kilns. However, the number of kilns repaired and remodeled is double the same as in the first quarter of last year with 11 units. Cement production is 2.6% higher than last year’s first quarter of 10.24 million tonnes.

Importing cement is really difficult…”Production will increase from April onwards”

A bulk cement trailer (BCT) moves and loads cement for transport in the silo (storage) of the Danyang Sungshin Cement factory./Photo = Newsis.

Some in the concrete and precast construction industries argue that the government should support cement imports. The argument is that the government should partially subsidize the cost because imported cement is more expensive than domestic cement. Domestic cement costs around 100,000 won per tonne. According to the KOTRA survey, the price of cement per ton in Japan, a country that produces cement, is 170,000 won, in the United States, 200,000 won, and in South America, 140,000 won. Shipping costs are separate.

However, it is almost difficult to import cement at the moment. Logistics is the biggest obstacle. Cement binds with moisture in the air and hardens slowly. In order to slow down the hardening process, cement warehouses, known as ‘silos’, must be built in railway stations and ports. We also need a dedicated ship to transport cement.

The cement industry emphasized that it is increasing production as much as possible. Most of the kiln winter repairs are completed between March and April. An industry insider said, “If the repaired kiln is operated seriously, cement production will increase further. There is,” he said.

“Some claim that the cement industry is artificially adjusting supply and demand to raise prices, but this claim should be avoided,” he said. “We will continue to do our best to co-exist with precast concrete and the construction industry.”

[저작권자 @머니투데이, 무단전재 및 재배포 금지]


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