The Rising Costs Of Raw Materials
To say the pandemic has thrown our lives into disarray would be an understatement. It has been a tough year to say the least, but we seem to be approaching a light at the end of the tunnel. But while businesses reopen and families reunite, there remain many challenges in supply chains around the world. In this article, we explain how the pandemic is affecting the cost of raw materials across the industry.
Industry groups have warned that raw materials are in short supply. Most notably, cement, timber and steel. The problem stems from issues in the supply chain, as well as a surging demand as lockdown eases. The issue extends to the wider industry; builders merchants across the country are facing a supply shortage.
What is the issue?
There are a number of factors that are causing the supply shortage.
Firstly, the pandemic has created major challenges in supply chains. As you can imagine, supply chains have had to cope with reduced staff, border closures and financial difficulties. This has made the supply process more turbulent. Shipping costs have increased too, which has put extra financial strain on suppliers.
Sweden, who supply almost half the structural wood used in the UK, are reporting that their current stock of timber is at its lowest levels for 20 years.
In addition, while the supply has reduced, the demand for these materials has skyrocketed. As businesses open up and life starts to return to normal, demand has increased sharply. The cement industry in particular is experiencing strong levels of demand.
Further, the weather in specific countries is also affecting certain products. The warm weather in Scandinavia is slowing the production of timber, whereas the colder weather in Texas is affecting the production of chemicals, plastics and polymers.
Unfortunately, the shortage, plus a sharp rise in shipping costs amid the pandemic, will likely create a rise in prices.
How much might prices rise by?
The Office for National Statistics has projected a rise of 7-8% in material prices this year. Some materials, including timber, are set to more than double in price.
The Times reported that the price of bagged cement could rise by 15%, chipboard by 10% and paint by 5%.
Will prices rise at Hitchcock & King?
At Hitchcock & King, we pride ourselves on our stock supply, quick turnarounds and great prices. Unfortunately, due to the industry-wide issues outside of our control, supply of certain products may be limited and prices may rise. We hope to be as transparent as possible with the situation, so please feel free to get in touch should you have any questions or queries.
At Hitchcock & King, you can find everything you need for your domestic or commercial building project. We offer a huge variety of products — everything from paintbrushes to lead flashing. Get everything you need all in one place, only with Hitchcock & King. Order early in the morning and get same-day delivery on your order. Alternatively, collect from your local branch.
Contact our team to place an order or get more information.