Link to original article by Concrete Financial Insights
Concrete Prices Per Cubic Yard – Q1 2021 vs. Prior Quarters
The $123.92 weighted average selling price per cubic yard, reported by the concrete producers tracked in the Concrete Financial Insights Index, for the first quarter of 2021 was $0.19 per cubic yard higher than the price in the preceding quarter.
While this $123.92 weighted average selling price of ready-mix concrete is virtually flat versus the selling price in the fourth quarter of 2020, input costs have been rising.
Raw materials costs are rising as cement and aggregate suppliers have implemented price increases. The costs in other key expense categories including diesel fuel and labor are rising as well. This suggests shrinking margins for ready mix concrete producers during the first quarter of 2021.
The First Quarter is the slowest for construction activity and may be impacted by severe weather such as experienced from the Midwest down through Texas this year. The results of the Second Quarter will provide a better indication of whether concrete producers can offset the impacts of rising input costs through increasing the selling price of concrete.
The weighted average selling price per cubic yard reported by the ready-mix concrete companies in the Concrete Financial Insights Index for Q1 of 2021 is down compared to the price of $126.09 in the same quarter of the prior year. The weighted average price realized in Q1 of 2020 was a bit of an anomaly as illustrated in the quarterly price evolution chart in the section below.
Many of the publicly traded participants within the US ready mixed concrete industry do not separately report concrete segment volumes and revenues. Five industry participants, who lead the industry in financial reporting transparency, through reporting US concrete volumes and pricing, are Eagle Materials, Martin Marietta, Summit Materials, US Concrete, and Vulcan Materials are tracked in the Concrete Financial Insights Index. The chart below shows the quarter-by-quarter average concrete price (weighted by volume) reported by these five publicly traded industry participants:
Quarterly Concrete Selling Price Evolution – January 2019 through March 2021
There is a bit of seasonality in the quarterly average prices reflecting regional price mix as the length of the ‘construction season’ varies across regions of the country. Looking at concrete selling prices on a full year basis, rather than quarter by quarter, eliminates this seasonality effect.
Concrete Price Evolution – 2015 through 2020
This chart compares the full year weighted average pricing reported by these five producers from 2015 through 2020. The weighted average of the full year selling prices reported by these five companies grew from $107.78 in 2015 to $124.37 in 2020 for a cumulative average growth rate of 2.9% over this period.
The National Ready Mixed Concrete Association estimates that the US concrete industry shipped 378 million cubic yards of ready-mixed concrete during 2020 and the five companies included in the Concrete Financial Insights Index of weighted average ready mixed concrete pricing represent only 7% of that volume. It is likely that this group’s weighted average pricing is higher than that of the overall US industry because these five firms have the technical capabilities and plant locations to service large commercial and infrastructure projects requiring higher strength mixes with more costly blends of raw materials.