Why The US Can’t Build Houses Fast Enough Anymore

CNBC・2 minutes read

Concrete and steel are facing shortages in the US due to increased demand for construction materials, while the paint industry is also impacted by supply chain disruptions and rising demand. The copper industry is experiencing growth with the rise of green technology, leading to concerns about potential shortages in the future.

Insights

  • Concrete, a vital material in construction, is facing shortages in the US due to disruptions caused by COVID, impacting infrastructure projects and leading to supply chain challenges.
  • The steel industry, crucial for various sectors, is experiencing a surge in demand driven by decarbonization efforts and infrastructure investments, with US steel producers investing heavily in new facilities to meet this demand and stabilize prices.

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Recent questions

  • Why is there a shortage of concrete in the US?

    Due to disruptions caused by COVID, the US is facing shortages of concrete, a crucial construction material.

  • What is the significance of copper in the global economy?

    Copper, known as "Dr. Copper," acts as a barometer for global economic growth. Its demand is increasing due to green energy projects and electric vehicles.

  • How are steel prices impacted by tariffs in the US?

    Steel imports in the US are subject to tariffs, affecting prices and domestic production. Tariffs incentivized heavy investments in US steel facilities.

  • What challenges does the paint industry face currently?

    The paint industry is experiencing shortages and price increases due to disruptions in the supply chain, climate change, and heightened demand during the pandemic.

  • What are the key drivers behind the surge in steel prices?

    Steel prices have surged post-pandemic due to supply chain disruptions and increased demand, especially with infrastructure investments.

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Summary

00:00

Construction Industry Faces Material Shortages and Challenges

  • Concrete is a crucial construction material facing shortages in the US.
  • Steel demand is increasing due to the shift towards a decarbonized economy.
  • Demand for paint materials surged during the pandemic, leading to shipping and driver shortages.
  • Concrete is extensively used globally, with about three tons used per person annually.
  • Cement, essential for concrete, is facing shortages in the US due to disruptions caused by COVID.
  • The US cement industry has a rich history and plays a vital role in infrastructure projects.
  • The industry faces challenges like labor shortages, supply chain disruptions, and price increases.
  • The industry aims for carbon neutrality by 2050 and is investing in eco-friendly cement formulations.
  • Copper prices have surged due to increased demand for electric vehicles and decarbonization efforts.
  • There are concerns about a potential copper shortage in the future due to insufficient mining and recycling infrastructure.

15:07

Copper and Steel: Key Players in Green Tech

  • Green tech is the biggest demand driver over the next decade, increasing the need for copper due to electrification.
  • Copper is referred to as "Dr. Copper" by traders and economists, acting as a barometer for global economic growth.
  • Major copper producers include South America (Peru, Chile), the United States (Arizona), Africa (Zambia), and Asia (Mongolia, Indonesia).
  • The demand for copper is expected to surge with the rise of green energy projects and electric vehicles.
  • Extracting copper is evolving with new technologies like Jedi, focusing on hydro metallurgy for efficient extraction.
  • Steel is crucial in various industries, experiencing a boom in demand and price spikes due to supply chain disruptions.
  • The US steel industry uses electric arc furnaces for production, with companies like Nucor and Steel Dynamics leading the way.
  • Steel prices have surged post-pandemic, with demand expected to rise further, especially with infrastructure investments.
  • Steel imports are subject to tariffs, impacting prices and domestic production, with dumping practices being a concern.
  • Maintaining high capacity utilization is vital for steel mills to cover fixed costs and meet growing demand effectively.

29:32

Steel tariffs boost US industry, paint faces shortages.

  • Steel industry faced challenges due to high imports before steel tariffs were imposed, leading to unsustainable levels of production.
  • Tariffs incentivized US industry to invest heavily in facilities, with close to $16 billion spent since 2018 on new and upgraded facilities.
  • New steel capacity is coming online in Texas, Kentucky, and Toledo, Ohio, expected to normalize prices.
  • Steel mills are projected to earn significant profits, with over $9 billion in revenue in six months and the infrastructure bill adding to profits.
  • Steel prices in the US are supported by a supply deficit, but prices are expected to drop by 15-20% initially before stabilizing.
  • Paint industry faces shortages and price increases due to supply chain disruptions, climate change, and increased demand during the pandemic.
  • Synthetic paint shortage is a major issue, impacting decorative, automotive, and industrial coatings.
  • Paint production relies on pigments, resins, solvents, and additives, with titanium dioxide being a costly and essential pigment.
  • Standardization of colors is crucial for the industry, with systems like Pantone ensuring consistency in color reproduction.
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