Global Sand and Stone | U.S. Sand and Stone Demand Grows 5% in 2021, 1.2 trillion USD Infrastructure Act Boosts Sand and Stone Industry!

2021, the total demand for sand and gravel in the United States reached 2.6 billion tons, up 4.97% year-on-year, and the demand for sand and gravel has shown a slight upward trend in recent years.

1.

Sand and gravel aggregates play an indispensable role in the construction industry, both in China and in the United States,, the history of the standard development of the aggregate industry in the United States is longer than that in China, and there are many reference parts in the development of the industry.

In today's U.S. market, aggregates are used in almost all types of public and private buildings, and substitutes for high-quality aggregates are extremely limited., like China, the aggregate industry in the United States is also a highly dispersed industry with a fragmented distribution.According to the data of 2021, the sand and gravel industry in the United States is composed of more than 5500 companies, with nearly 11,000 aggregate sand and gravel aggregate production lines. Under the fragmented distribution, the overlay mining process is complicated, and companies in the industry usually use acquisitions to enter new markets and expand their market share.

1.1 is periodic

sand and gravel have been used as building materials. At the beginning of the 20th century, the production of construction sand and gravel in the United States was small and limited in use.and today, the annual output of sand and gravel is in the forefront of the non-fuel mineral industry and is an indispensable part of the construction industry.

In general, the United States is basically self-sufficient in sand and gravel. The demand for sand and gravel for construction mainly depends on the level of construction activities and is closely related to infrastructure construction and real estate investment. Fromhistorical data, public sector construction activity is more stable than private investment, and tends to receive more stable funding throughout the economic cycle.

Figure 1-1: Private Sector Construction Activity Fluctuation in U. S.

Data Source: Cement Big Data (https://data.ccement.com/), Vulcan Materials Annual Report

while private sector buildings (mainly residential and non-residential buildings) are usually more affected by the general economic cycle than public investment projects (especially roads, roads and bridges). The recession of 1982 can be reflected in the low production of sand and gravel for construction. In addition, the economic crisis of 2007-2008 also had a great impact on the private sector, resulting in a sharp decline in the overall demand for sand and gravel aggregates for construction. It can be seen that the sand and gravel aggregate industry has significant periodicity.

On the whole, the demand for sand and gravel aggregates is closely related to the economic situation in the United States and has cyclical characteristics,, however, in terms of prices, aggregate prices in the United States have generally shown an upward trend in the past 40 years. Even in the economic downturn, they often rise against the trend.

1.2 head enterprises is relatively stable.

transportation is the main factor affecting the delivery price of construction sand and gravel, and truck transportation is the main mode of transportation used in the construction sand and gravel industry,Due to high transportation costs, construction sand and gravel are often sold locally. The gravel mining sites in the United States basically match the urban agglomeration and population distribution, and are highly decentralized and close to the end customers. This can be seen from the business layout of the two major sand and gravel suppliers, Vulcan Materials and Martin Marietta Materials.

has also led to a large number of small private holding companies in the aggregate industry.According to the annual report of Vulcan Materials, the top ten aggregate producers accounted for 33% of the total aggregate production in the United States in 2021, and Vulcan Materials, as an industry leader, has a total market share of less than 10% in the United States (excluding the acquisition of American Concrete Company).

Figure 1-2: Stable concentration of aggregate head enterprises in 2017-2021

Data Source: Cement Big Data (https://data.ccement.com/), Vulcan Materials Annual Report

However, although the U.S. aggregate industry has many companies, but its head enterprise position is solid, the head enterprise business division points often have resources or price advantages, profitability is relatively excellent.

2. American Sand and Stone Industry

2.1 Demand Analysis

According to data from the U.S. Geological Service,2021, the total demand for sand and gravel in the United States reached 2.6 billion tons, up 4.97% year-on-year, and the demand for sand and gravel has shown a slight upward trend in recent years.

Figure 2-1: U.S. sand and gravel aggregate demand rises in 2021

data source: Cement Big Data (https://data.ccement.com/), U.S. Bureau of Geology

in terms of product structure, sand and gravel accounted for 38.5% and gravel 61.5% of the demand for sand and gravel in the United States in 2021.In recent years, the demand for gravel in the United States has generally increased as a proportion of total sand and gravel demand.

Figure 2-2: U.S. gravel demand as a percentage of total sand and gravel demand increased in 2001-2021

data source: Cement Big Data (https://data.ccement.com/), U.S. Bureau of Geology

2.1.1 Sand and Gravel

in 2021, the production of sand and gravel (natural sand and gravel) for construction in the United States will be about 1 billion tons, up 6.16% from the previous month and worth about US $9.9 billion.due to the growth of private and public construction markets, the consumption of construction sand and gravel increased in 2021.

Figure 2-3: Production and Growth Rate of Sand and Gravel for Construction in 2021

data source: Cement Big Data (https://data.ccement.com/), U.S. Bureau of Geology

According to the U.S. Geological Service, about 3870 companies operated 6800 pits in 50 states in 2021. Of the 50 states, California, Texas, Arizona, Minnesota, Utah, Michigan, Washington, Ohio, Colorado and New York together account for about 53% of the total output.

In terms of use, the U.S. Geological Service estimates that,about 46% of construction sand and gravel are used as Portland cement concrete aggregate, 21% as road base, overburden and road stability, 13% as building backfill, 12% as asphalt concrete aggregate and other asphalt mixtures, 8% as other uses (concrete products, filtration, golf course maintenance, gypsum and shotcrete, railway ballast, road stability, roof particles and ice and snow control, etc.).

Figure 2-4: Distribution of Sand and Gravel Uses in the United States in 2021

data source: cement big data (https://data.ccement.com/)

from the source, the most important commercial sources of sand and gravel are glacial sediments, river channels and floodplains.mining offshore aggregates for onshore construction projects, the use of offshore sediments in the United States is mainly limited to beach erosion control and replenishment.

2.1.2 Gravel

2021, the United States will produce about 1.5 billion tons of gravel, up 2.04% from 1.47 billion tons in 2020 and worth more than US $19 billion.Due to the growth of private and public construction markets, gravel demand increased by 4.58% to 1.6 billion tons in 2021.

Figure 2-5: Gravel production in 2021

data source: cement big data (https://data.ccement.com/)

According to the U.S. Geological Service, about 1410 U.S. companies operate 3440 quarries in 50 states, of which Texas, Missouri, Florida, Pennsylvania, Ohio, Georgia, North Carolina, Virginia, California and Tennessee together account for 54% of the total gravel production.

In terms of use, the U.S. Geological Service estimates that,about 72% of crushed stone is used as construction aggregate, mainly for road construction and maintenance, about 16% is used in cement manufacturing, 8% is used in lime manufacturing, 2% is used in agriculture, and the remaining 2% is used in other uses such as chemistry.

Figure 2-6: Distribution of gravel use in the United States in 2021

data source: cement big data (https://data.ccement.com/)

Of the crushed stones produced in the United States in 2021, 70% are limestone and dolomite, 15% are granite, 6% are dark rocks, 5% are miscellaneous rocks, 3% are sandstone and quartzite, and the remaining 1% are divided into marble, volcanic slag and volcanic slag, calcareous marl, slate and shell according to their tonnage from high to low. Among them, high-purity limestone and dolomite resources are mainly distributed in the central and eastern.

2.2 Import and Export Analysis

In general, the United States is basically self-sufficient in sand, gravel and gravel, and its import and export volume is relatively small.from the export point of view, the export volume of sand, gravel and gravel is around one million tons all year round, with little fluctuation. From the import point of view, the proportion of sand and gravel imports is very small, sand and gravel imports accounted for less than 1% of the apparent consumption of sand and gravel, sand and gravel imports decreased by 20% and 10% respectively in 2021.

Figure 2-7: Sand and gravel imports in the United States decreased in 2021

data source: cement big data (https://data.ccement.com/)

2.3 price analysis

prices, the price of sand and gravel aggregates in the United States is generally on the rise, with sand, gravel and gravel rising 105.82% and 141.19% respectively since 2000.2021, the average price of sand and gravel in the United States was US $9.9/ton, up 3.34% year-on-year, and the price of gravel was US $13/ton, up 6.38% year-on-year.

Figure 2-8: Sand and gravel aggregate prices in the United States generally show an upward trend.

data source: cement big data (https://data.ccement.com/)

3.

Compared with other industries in the United States, sand and gravel aggregates are relatively scattered, but the head company is more fixed.According to the annual report of Vulcan Materials, the industry CR10 (by sales volume) was 33% in 2019, fell to 31% in 2020, and rebounded to 33% in 2021. In the past five years, the industry CR10 has been relatively stable and has been above 30% for a long time.

According to the relevant yearbook issued by the U.S. Geological Service (the latest is 2017), gravel CR10 (by yield) is 47%, and sand and gravel CR10 (by yield) is 48%.

Table 3-1: Ranking of Top 10 Aggregate Suppliers in the United States

data source: Cement Big Data (https://data.ccement.com/), U.S. Bureau of Geology

, Vulcan Materials and Martin Marietta Materials always occupy the position of the first and second largest gravel producer in the United States.

3.1 Vulcan Materials (Vulcan Materials)

Vulcan Materials is the largest supplier of construction aggregates in the United States, mainly producing gravel, gravel and sand. At the same time, the company is also a major manufacturer of asphalt mixture and ready-mixed concrete.

According to the company's annual report for 2021, the company achieved annual revenue of US $5.552 billion, a year-on-year increase of 14.32%, and realized a net profit of US $0.6708 billion, a year-on-year increase of 14.76%. Vulcan Materials divides its business into four major sectors: aggregate, asphalt, concrete and calcium. Aggregate is the company's main business, 2021 the company's aggregate revenue of $4.345 billion, up 10% year-on-year, accounting for 78.26% of the company's total revenue. In 2021, the company delivered 0.2229 billion tons of aggregate, up 7% year-on-year, and the gross profit per ton reached US $5.81, up 4% year-on-year. It is worth mentioning that in recent years, the proportion of the company's supply to the public sector has shown a downward trend. In 2011, the company's supply to public investment projects accounted for 55%, and by 2021, this proportion has dropped to 42%.

, as the largest aggregate supplier in the United States, Vulcan Materials has its unique industry position,According to the company's financial report, in the fourth quarter of 2021, the company accounted for 28.66% of the top 10 building materials manufacturers in the United States, ranking first (further 34.5% after the acquisition of the sixth largest US Concrete).As of December 31, 2021, the company's business has covered 22 states in the United States, with 404 aggregate factories, 69 asphalt factories, 173 concrete factories and 1 calcium factory,aggregates are as high as 15.6 billion tons.

Figure 3-1: Vulcan Material Aggregate Factory Distribution

Data Source: Cement Big Data (https://data.ccement.com/), Company Annual Report

As stated in the company's annual report, aggregates are used in almost all types of public and private buildings. There are currently no substitutes for high-quality aggregates, and there are large entry barriers in most markets, which restrict the company's expansion in certain areas. At the same time, it also increases the company's aggregate reserves in existing areas, and the company fully considers the population employment factor when deploying its business, which is the long-term driving factor of aggregate demand. Moody's Analytics report pointed out that in 2020-2030, 75% population growth, 72% household growth and 70% employment growth in the United States will occur in states covered by Vulcan materials.Therefore, although industry entry barriers such as high transportation costs limit the company's expansion, from the demand side, the company has strong growth power for a long time.

Figure 3-2: Vulcan Materials Business Covering State Population, Employment, Household Situation

Data Source: Cement Big Data (https://data.ccement.com/), Company Annual Report

3.2 Martin Marietta Materials (Martin Marietta materials)

Martin Marietta Materials is a building materials company based on natural resources and the largest underground aggregate mine operator in the United States,'s Eastern Group has 14 active underground mines.As of December 31, 2021, the company's business has covered 28 states in the United States and has 350 aggregate plants.

Figure 3-3: Martin Marietta MaterialsCompany Quarry and Underground Mine

Data Source: Cement Big Data (https://data.ccement.com/), Company Annual Report

According to the company's annual report for 2021, the company achieved annual revenue of US $5.414 billion, an increase of 13.88% year-on-year, and realized a net profit of US $0.7025 billion, a decrease of 2.6% year-on-year.In 2021, the company delivered 0.2012 billion tons of aggregate, and the average selling price per ton of aggregate was US $15.08, up 2.1% year on year. In 2021, the 34% of the company's organic aggregate shipments were contributed by contractors related to highway and other public infrastructure projects, and the rest was mainly sold to contractors for non-residential and residential construction projects.

Based on current production levels, the company's total aggregate reserves are approximately 78 years.environmental and zoning regulations in the United States make it increasingly difficult for the aggregate industry to expand existing quarries and develop new quarry businesses, the company has also actively participated in industry consolidation, believing that future growth may depend in part on other businesses in the acquisition industry. As stated in the company's financial report, selective acquisitions and joint ventures will be the company's continuous strategy. The acquisition enables the company to expand its customer base by increasing rail transportation. Currently, the company's rail network mainly serves the Texas, Florida, Colorado and Gulf Coast markets.

4. Development Trend Outlook in 2022

4.1 Sand Aggregate Demand Active

sand and gravel aggregate is a key material for the construction of houses, factories, roads, bridges, water and electricity and other facilities, and is widely used in public construction projects and private investment projects in the United States.

the downstream of sand and gravel in the United States is mainly the construction industry. The long-term growth of total construction demand is affected by public and private construction sector activities and construction work related to infrastructure improvement throughout the country,Therefore, the business of sand and gravel enterprises depends to a large extent on the prosperity of the U.S. construction market and economy. In 2022, both the public and private construction sectors in the United States showed strong vitality and became a potential factor supporting the demand and price increase of sand and gravel aggregates.

Figure 4-1: U.S. GDP Growth Rises in 2021

data source: cement big data (https://data.ccement.com/)

the public sector, historical expenditure on public infrastructure projects has been relatively stable, and government allocations and expenditures are not sensitive to interest rates relative to private sector expenditures.on November 15, 2021, US President Biden signed the Infrastructure Investment and Jobs Act, which reached US $1.2 trillion, making it the largest infrastructure bill in the United States in half a century.the bill includes nearly US $550 billion in new infrastructure investment, it will reauthorize ground transportation projects within five years and will invest an additional US $110 billion in building roads and bridges and supporting major renovation projects.the bill provides the largest increase in federal funding for highways, roads and bridges in more than 60 years, spending nearly $350 billion to help build and repair U.S. highways, roads and bridges. In the 2022 fiscal year alone, it will allocate $66.9 billion and will gradually increase to 72.1 billion in the 2026 fiscal year. It also includes the construction and upgrading of railways, airports, seaports, and sewage treatment systems.this will boost the business of sand and gravel suppliers and make aggregate demand active.

the private construction sector, in the first quarter of 2022, the number of new housing starts in the United States rebounded sharply.According to data released by the U.S. Census Bureau, the number of private housing starts in February was seasonally adjusted to 1.77 million units, up 6.8% from the previous month and 22.3% from the previous year, the fastest growth rate since 2006. The operating rate of single-family houses reached 1.215 million units, up 5.7%. The completion rate of single-family houses was 1.034 million units, up 12.1% from the previous month. The number of multi-family houses started increased to 554,000 units, it was the highest growth rate since January 2020.

in the past ten years, the United States has experienced a sharp decline in both inventory and vacancy rates.According to data released by the National Association of Realtors (NAR) in February, the inventory of unsold homes across the United States fell to a record low of 860,000 units, equivalent to only 1.6 months of sales. Historically, U.S. housing inventories have generally bottomed out in December and picked up in the spring buying season, while inventories fell 11.9% month-on-month in February 2022, according to the monthly report released by Zillow. In addition, although mortgage interest rates have risen in the past two years, they are still low relative to history.

Figure 4-2: U.S. mortgage rates remain low relative to history

data source: cement big data (https://data.ccement.com/)

from the data of March 2022, although new housing construction is feeling the pressure of inflation, labor shortage and rising interest rates, the US housing market is still hot.in March 2022, the total number of new housing starts in the United States rose to 1.79 million annually, the highest level since 2006, with a total of 1.87 million construction permits and strong expectations for future construction activities; the number of single-family housing starts at an annual rate of 1.2 million, down slightly, but still well above pre-epidemic levels. The number of starts for multi-family houses (including apartment buildings and condominiums) increased to 593,000 in March. In April, U.S. builder confidence fell to a seven-month low, still above pre-epidemic levels.Overall, the U.S. public and private construction sectors will be more active in 2022, and sand aggregate demand and prices are expected to be boosted.

4.2 concentration further increased

the U.S. aggregate industry is more fragmented than other industries, specifically,its head enterprise position is solid, environmental and zoning regulations make it increasingly difficult for the aggregate industry to expand existing quarries and develop new quarry operations,At present, companies in the industry usually enter new markets and expand their market share through acquisitions.

In 2021, the top ten aggregate producers accounted for 33% of the total aggregate production in the United States,As mentioned above, in terms of the top two companies, acquisitions are an important part of the company's development strategy, and the concentration of the U.S. sand and gravel industry will be further enhanced.

Table 4-1: Acquisition of Martin Marietta Materials and Vulcan Materials in 2021

Data Source: Cement Big Data (https://data.ccement.com/), Company Annual Report