Suppliers holding materials price quotes for just 24 hours

Aaron Morby 2 months ago
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Contractors are reporting some suppliers are now only prepared to hold prices for 24 hours for tender quotes on jobs.

Cement plants in Spain are closing due to energy prices
Cement plants in Spain are closing due to energy prices

The fresh volatility in materials prices is causing some contractors to think twice before entering fixed-price or long-term contracts.

The latest market report from materials producers and builders merchants’ trade bodies reveals that the fresh wave of energy price hikes are already being felt in construction.

It has prompted a joint task force monitoring materials, which has been set up by the Construction Products Association and Builder Merchants Federation, to step up the frequency of its meetings to every three weeks to respond to changing conditions arising from price inflation and the war in Ukraine.

Some manufacturers of energy-intensive products are now warning that surcharges will be slapped on products linked to surging energy costs.

The cost of energy is impacting manufacturers across Europe, with reports of cement plants in Spain closing due to the latest increases.

In the UK manufacturers report the supply picture remains broadly stable in terms of full production with good stocks and availability of most products.

But supply challenges continue to affect bricks, aircrete blocks, roof tiles, gas boilers, plastic drainage and other plastic products dependent on polymers, and some electrical products particularly those using semi-conductors.

Manufacturers are warning that while brick and block stocks have also increased slightly during the quieter winter month as the market accelerates in the spring it will be essential for builders to plan ahead and work with manufacturers to ensure timelines of availability.

The boiler market has been impacted by unprecedented demand coupled with supply chain challenges for steel, cardboard, plastics and electronic components.

While availability will remain constrained over the summer months, manufacturers remain hopeful that the supply and demand will normalise by the end of the year.

On plastic products, there are reports in some areas of shortages of raw materials that could lead to spikes in prices, but indications are hopeful that this may be resolved later in the spring.

Paints and coatings continue to be affected by ongoing raw material shortages recently exacerbated by further lockdowns in China and by the war in Ukraine. This is likely to affect prices, and possibly the availability of some products over the coming months.

Looking ahead, the war in Ukraine and the resulting sanctions on Russia and Belarus are likely to constrain the supply of pallets, birch plywood and OSB (oriented strand board).

These countries are major suppliers of pallet wood and manufactured pallets, as well as large producers of the components of the resins used in wood-based panel manufacture including OSB. Russia is also one of the main sources of birch plywood, used in a variety of applications from transport and shopfitting to furniture and die cutting.

 

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