Gypsum industry news

US: James Metcalf, the CEO of United States Gypsum, received a pay rise of 31% to US$7.7m in 2012, according to figures released in the company's proxy statement.

Although Metcalf's basic salary rose by 5% to US$867,000 in 2012, other perks such as stock awards, option awards and non-equity incentive plan compensation took the total from US$5.86m in 2011 to US$7.7m in 2012.

In 2012 the US wallboard manufacturer reported a loss of US$126m, reduced from US$390m in 2011.

US: More than a dozen lawsuits alleging price-fixing on the part of major manufacturers of wallboard have been consolidated in the Eastern District of Pennsylvania. The location was chosen as most of the parties are located in the area and a majority of the parties advocated for consolidation in that district. US District Judge Michael Baylson will handle the case.

"From at least September 2011 to the present the defendants, manufacturers of gypsum board, combined and conspired to fix and raise the prices at which they sold gypsum board in the United States beginning with large and coordinated price increases that all became effective on or about 1 or 2 January 2012," according to the complaint filed in one case originating in the Eastern District of Pennsylvania, Janicki Drywall versus CertainTeed.

Major manufacturers of wallboard have annual sales of more than US$5bn, according to the complaint and the defendants are seeking treble damages. The defendants in the suit account for more than 99% of wallboard sold in North America, according to the complaint. They are USG, National Gypsum, CertainTeed, Georgia-Pacific, American Gypsum, Lafarge, Temple-Inland and PABCO.

In a previous status conference for the Eastern District of Pennsylvania cases, Steven Bizar of Buchanan Ingersoll & Rooney was named as interim liaison counsel for the defence, while H Laddie Montague Jr of Berger & Montague had been named interim liaison counsel for the plaintiffs.

US: Progress on two new flue gas desulphurisation (FGD) projects in Colorado and Indiana have been announced. Neumann Systems Group has completed 60% of its US$73.5m contract to install an emissions scrubbing system at the Martin Drake Power Plant in Colorado and the first stage of the Indiana-Kentucky Electric Corporation's US$670m pollution-control project at the Clifty Creek plant in Indiana is now operational. Both of these projects will increase the supply of FGD gypsum in the US.

Neumann Systems Group has a 2011 contract worth US$121m to design, build and install an emission-scrubbing system on two of the Martin Drake Power Plant's three power production units. The NeuStream system is designed to remove more than 95% of the sulphur dioxide from the emissions of the two units, as required by US Environmental Protection Agency (EPA) rules that take effect in 2017, and convert it to gypsum that can be sold for fertiliser and building materials.

At the Indiana-Kentucky Electric Corporation's Clifty Creek Power plant in Indiana, plant officials announced that one of its two new flue gas desulphurisation scrubbers has begun feeding exhaust gas to produce cleaner emissions. These scrubbers will remove up to 98% of sulphur dioxide emissions creating synthetic gypsum. The Clifty Creek plant has six 217MW units that will feed to two scrubbers. The second scrubber is scheduled to begin operations in May 2013. The project began in 2007 but was postponed from 2009 to 2011 due to the economic downturn.

US: Holcim (US) Inc., a major cement manufacturer and part of Switzerland's Holcim Ltd., has filed an application with the Montana Department of Environmental Quality for an operating permit to quarry gypsum on 21.4 hectares (53 acres) of private land about 15km southeast of Geyser in Judith Basin County. The gypsum will be used to make cement at the company's Trident Cement Plant near Three Forks, according to Herb Rolfes, supervisor of the Department of Environmental Quality's (DEQ) Operating Permit Section. Gypsum has been mined at the site in the past.

"It should be a relatively benign type of mine," Rolfes said. "There's no real issues as far as chemistry or water quality that will be a problem." DEQ officials are reviewing the application and will write a draft environmental assessment that will be put out for public comment in the second quarter of 2013. About 3.9 hectares (nine acres) would be disturbed over the next five years, with about 21.4 hectares (53 acres) being disturbed over the estimated 18-year life of the mine.

US: The United States Geological Survey (USGS) has released data regarding gypsum production and consumption in the United States during 2012. This shows that a total of 9.9Mt of crude gypsum, 11.8Mt of synthetic gypsum and 12.1Mt of calcined gypsum was produced during the year. In 2011 the totals were 8.9Mt (crude), 11.8Mt (synthetic) and 11.9Mt (crude). Total consumption came to 24.6Mt, a 3.8% rise from 2011 when the country consumed 23.7Mt.

The leading crude gypsum-producing States were, in descending order, Oklahoma, Texas, Iowa, Nevada, and California, which together accounted for 58% of total output. Overall, 47 companies produced gypsum in 34 states and around 90% of all gypsum was used in wallboard and plaster production. Around 12% of the gypsum consumed was imported.

The USGS pointed to increased construction activity as the main driver of the increased demand, consumption (up 4%) and production (up 11%) of gypsum in the US in 2012. The average price of gypsum remained static at ~US$7/t crude (at mine) and ~US$30/t calcined (at plant). The USGS added that the US gypsum wallboard capacity in 2012 was in the region of 33Bn ft² (3.07Bn m²).

US: United States Gypsum (USG) has applied for a permit to withdraw up to 2.11 million litres/day of water for a gypsum plant near Crystal River in Florida. However, company spokesman Robert Williams said that the plant is not planned in the immediate future.

USG's permit application is pending with the Southwest Florida Water Management District. The district has sent USG a letter seeking more information to make sure that the planned withdrawals won't cause salt-water intrusion or otherwise harm the groundwater.

In 2011 USG purchased 72 hectares near the Progress Energy Florida power complex north of Crystal River to warehouse synthetic gypsum that is created by scrubbers at the coal-burning plants. Progress, whose parent company is Duke Energy, has a contract to sell the gypsum to USG, which is planning to build a warehouse sometime in 2013 to store the product until it is shipped to a wallboard manufacturer.

"USG proposes to construct a state-of-the art facility that is projected to bring 130 new jobs to the area and will incorporate water conservation to the greatest extent feasible," the company's consultant, Progressive Water Resources, wrote in its application letter to the water district. The letter requests a 20-year permit and states it is still negotiating for easements to the well sites and a pipeline that would transport water from the well to the manufacturing centre.

US: The US-based building materials provider Eagle Materials has reported financial results for the third quarter of the 2013 fiscal year, which ended on 31 December 2012. These showed that its revenue was up by 33% compared to the same period of the prior fiscal year. Earnings per share were up by 429% year-on-year.

Eagle's third quarter sales volumes improved across all business lines, with sales prices improving in all but one of it business lines. Its gypsum wallboard segment experienced the most significant improvement, with an increase in average net sales prices of 27% as compared with the same quarter of the prior fiscal year.

Eagle's Gypsum Wallboard and Paperboard division's third quarter operating earnings of US$24.8m were up by 362% compared to the same quarter of the 2012 fiscal year. Higher wallboard average net sales prices, higher gypsum wallboard and gypsum paperboard sales volumes and lower recycled paper input costs were the primary driver of the quarterly earnings increase.

Gypsum wallboard and paperboard revenues for the third quarter were US$100.3m, a 37% increase from the same quarter a year ago. The revenue increase reflects primarily higher wallboard average net sales prices and sales volumes. The average gypsum wallboard net sales price for the third quarter was US$120.55/1000ft2, 27% greater than the same quarter a year ago. Wallboard sales volume for the quarter of 519Mft2 represents a 23% year-on-year.

US: USG Corporation (USG) has reported its results for the fourth quarter of 2012 and for the year as a whole. These results showed that sales had increased by 12% to US$815m in the final quarter of the year, but that USG also made an operating loss of US$8m. This, however, was lower than the US$43m that it lost in the final quarter of 2011. The group's adjusted operating profit was US$5m, versus a US$38m adjusted operating loss in the 2011 quarter, but it made a net loss of US$13m. This compares favourably to the 2011 quarter, when it made a loss of US$100m.

In terms of sales, its US gypsum wallboard shipments came to 1.22Bnft² against 1.09Bnft² in the 2011 quarter. The average price was US$132.26/1000ft² ­up from US$112.59/1000ft² in the same period of 2011. USG also announced that its SHEETROCK Brand UltraLight Panels accounted for 49% of all of its US wallboard shipments for the period.

The Corporation recorded full year 2012 net sales from continuing operations of US$3.2bn, an operating profit from continuing operations of US$73m and a net loss of US$126m. For the full year 2011, net sales from continuing operations were US$2.9bn, the operating loss from continuing operations was US$206m and its net loss was US$390m.

"Our wallboard results were the strongest we have seen in over three years, and we achieved our fourth consecutive quarter of positive adjusted operating profit," said James S Metcalf, Chairman, President and CEO. "The results show that commercial markets remain choppy, but we continue to see signs of a housing recovery."

US: Gypsum production in the US has increased by 11% to 9.9Mt in 2012 compared to 8.9Mt in 2011, according to a report from the United States Geological Survey (USGS). The USGS attributed this rise to increases in activity in the US housing and construction markets.

In its Mineral Commodity Summary for Gypsum in 2012, the USGS reported that the apparent consumption of gypsum increased by 4% to 24.6Mt in 2012 compared to 23.7Mt in 2011. Wallboard products sold rose slightly from 1.60BM2 in 2011 to 1.63BM2 in 2012. Overall, 47 companies produced gypsum in the US at 54 mines and plants in 34 States. Approximately 90% of domestic consumption, with a total of approximately 22Mt, was accounted for by manufacturers of wallboard and plaster products. At the beginning of 2012 the production capacity of operating wallboard plants in the US was about 3.07BM2/yr.

In its overview of the industry the report commented that the US ranked fourth in the world for gypsum production after China, Iran and Spain. An increased use of wallboard in Asia, coupled with new gypsum product plants, spurred increased production in that region. The report expected that the worldwide production of gypsum would rise driven by the increasing popularity of wallboard due to its economy and efficiency.

Lastly, it was noted that if the construction of wallboard plants designed to use synthetic gypsum from flue gas desulfurisation (FGD) units continues this will result in less mining of natural gypsum. The availability of inexpensive natural gas, however, may limit the increase of future FGD units and, therefore, the production of synthetic gypsum.

US: Legislation intended to better regulate the use of wallboard in homes and buildings is headed to the desk of US President Barack Obama, several years after the emergence of the 'toxic' Chinese wallboard saga.

The US House of Representatives approved the Drywall Safety Act of 2012 on 1 January 2013, amid the chaos regarding the 'fiscal cliff.' It approved the measure on an overwhelming 378-37 vote.

In December 2012 Senator David Vitter successfully pushed a Senate amendment to loosen some of the bill's language and to win the support of the National Association of Home Builders, which had previously opposed the bill. Once the bill was amended, it sailed to congressional approval.

"Many families were faced with the nightmare of building or repairing their homes with toxic wallboard after Hurricane Katrina and I want to make sure this doesn't happen again. This is good news for homeowners that we were able to pass this swiftly before the new Congress starts," said Vitter on 2 January 2013. "This legislation will make sure unsafe wallboard won't be sold in the future and that wallboard manufacturers are held accountable."

The Drywall Safety Act sets chemical standards for domestic and imported wallboard, and also establishes guidelines for its disposal. The bill allows the Consumer Product Safety Commission to set rules to ensure that existing 'toxic' wallboard is properly disposed of. The legislation also requires all wallboard used in the country to be labeled with the manufacturer's name.