Aggregate volumes dip, prices rise in second quarter

By Kevin Yanik| August 9, 2023

Although aggregate producers may be ready to upgrade equipment, dealers are challenged with providing quotes that last. Photo: P&Q Staff

Although the 2023 trend with aggregate sales volumes is that they are down, producers continue to make financial gains with pricing. Photo: P&Q Staff

The downward trend in aggregate sales volumes continued into the second quarter of 2023.

Vulcan Materials, Martin Marietta and Summit Materials were among the industry’s public producers to indicate their aggregate volumes were down. Fortunately, these public companies and others once again found a pathway to financial growth by focusing on price – raising them further – before the second quarter closed.

“Martin Marietta delivered exceptional performance across nearly every safety, financial and operational measure in the second quarter,” says Ward Nye, chairman and CEO of Martin Marietta, whose aggregate shipments slipped 5.7 percent in the second quarter. “These impressive results, despite lower aggregates shipments, demonstrate the success of our value-over-volume commercial strategy and the durability of our business model through various macroeconomic conditions.”

The second-quarter narrative at Summit was similar.

“Sustained pricing momentum across the portfolio, together with solid demand fundamentals and very strong operational execution, resulted in [a] remarkable second-quarter performance and several financial records for our business,” says Anne Noonan, president and CEO of Summit Materials, whose net revenue tied to aggregates jumped 13 percent in the quarter.

Here’s a second-quarter rundown of several public producers with businesses involving aggregates.

Vulcan Materials

Although Vulcan’s aggregate shipments dipped 1 percent in the second quarter, the company’s freight-adjusted selling prices for aggregates increased 15 percent, or $2.44 per ton, versus the prior year.

According to Vulcan, pricing momentum and solid operational execution in its aggregate business drove a 22 percent improvement in cash gross profit per ton to $9.76 per ton in the quarter.

“Our earnings growth through the first half of 2023 reflects the compounding benefits of the consistent execution of our strategic disciplines and the strength of our aggregates-led business,” says Tom Hill, chairman and CEO of Vulcan. “Aggregates gross profit margin has expanded 230 basis points, and cash gross profit per ton has improved 23 percent to $8.98 per ton. Strong sales and operating momentum across our business is expected to carry through the rest of the year. Shipments have benefited from large industrial projects, and residential construction activity has been better than expected.”

Martin Marietta

Although Martin Marietta’s second-quarter aggregate shipments dropped nearly 6 percent, the company’s gross profit tied to aggregates jumped 20.7 percent to a quarterly record of $370.9 million.

Companywide, Martin Marietta’s total revenues were up 10.9 percent in the second quarter to $1.82 billion. The company’s building materials business, which consists of aggregates, cement, ready-mixed concrete, asphalt and paving, generated $1.74 billion of that – a second-quarter record for the company.

“As record-setting public funds for infrastructure and manufacturing begin to enter the U.S. economy, we continue to expect that aggregates demand will accelerate in the second half of 2023,” Nye says. “This well-chronicled increased investment should largely offset the current residential construction air pocket, which we expect to bottom in the third quarter of 2023.”

Holcim

Holcim’s U.S. and Canadian operations experienced strong demand in the second quarter, with the company noting that onshoring activities and energy sector investments underpinned growth.

Holcim’s quarterly net sales in North America to external customers were up 7.3 percent, and recurring EBIT (up 7.3 percent) grew as well. For the first half of the year, Holcim’s net sales in North America to external customers were up 11.4 percent while recurring EBIT was up 20 percent.

Heidelberg Materials

Heidelberg Materials’ first-half 2023 revenue deriving from North America was up 16 percent. The increase was the largest percentage gain of the five global regions Heidelberg Materials serves.