The explosive growth of %ArtificialIntelligence (A.I.) data centres in the U.S. is significantly increasing demand for %Cement.
According to the American Cement Association, demand for cement is expected to rise by nearly one million metric tonnes over current levels within the next three years.
Data centres across the U.S. are projected to consume about 247,000 metric tonnes of cement in 2025, and 860,000 metric tonnes over the next three years, said the association in a report.
The increased need for cement is good news for the stocks of major construction companies such as Eagle Materials (EXP), Martin Marietta (MLM), and Vulcan Materials Co. (VMC).
The American Cement Association says there were 5,426 operational A.I. data centres in the U.S. at the end of March this year.
That number is projected to surpass 6,000 by the end of 2027, driving the need for more cement and concrete.
The demand growth comes as leading technology companies such as %Amazon (NASDAQ: $AMZN), %Microsoft (NASDAQ: $MSFT), and %MetaPlatforms (NASDAQ: $META) race to build and power A.I. data centres.
Technology companies currently account for about 25% of all new data centre projects in the U.S., according to market information.
Despite the projected growth, challenges to meeting the cement demand loom. These include regulatory hurdles and labour shortages that could hinder construction, says the association.
Additionally, data centres are projected to increase their share of national electricity consumption from 4.4% in 2023 to 12% by 2028.
Many technology companies, such as Microsoft, are turning to nuclear power to meet their future electricity needs.
The stock of Eagle Materials, a leading American cement and concrete supplier, has declined 16% this year to trade at $204.77 U.S. per share.
