b'Roof ing Indust ry Experiencing Price IncreasesBy Heidi Ellsworth, RCS PartnerSince t he st artofThis is not something that roofing manufacturers are COVID-19 in t hepleased about but it is a fact that there will be price spring of 2020, t heincreases and roofing contractors should be aware. roofing indust ryTheAssociated Builders and Contractors Chief has been affect edEconomist, Anirban Basu stated in a recent press on several front srelease, ?This dynamic (of building material price including buildingincreases) is already observable, for example, in the mat erial priceprices of softwood lumber. As America?s single-family housing construction boom continues, many builders increases. Roofingare ordering softwood lumber. With suppliers companies arecollectively lacking the near-term capacity to easily fill seeing increasesthese orders, prices were spiking for much of 2020. around t he count rySimilar conditions may influence other commodities for all t ypes oflater this year as global growth accelerates. This building andmeans that contractors need to think long and hard roofing product s. about the existence and structure of escalation clauses as they negotiate future work.?The lumber industryIn November and December of 2020, United Asphalts continues to see pricewas hit with significant increases to the price of raw increases andmaterials. They recently announced, ?We are forced to according to theincrease our prices by an average of 10% in all markets National Home Buildersfor many reasons, including the ongoing ripple effects Association, ?Lumberof the COVID-19 pandemic.?prices increased 14.9% in August, marking the largest four-month gain since such data was first recorded inSo, although many manufacturers must pass on price 1949 and the second-largest gain since seasonallyincreases, they are more committed than ever to adjusted data became available in 1975.? extreme customer service. ?We are working with all of our customers for long-term forecasting our roofing Shingle allocations and price increases have also beenasphalts so they can bid and complete jobs profitably,? prevalent throughout 2020 due to high levels ofstated Polston.storm-related re-roofing and limited raw materials.And this is being found in the metal industry too. Roof According to a roofing contractor?s website, ?ThisHugger recently announced, ?As most of you are week a roofing manufacturer put out a 4-6% priceaware, several costs increase in steel have been increase effective August 17 which follows two otherannounced in addition to some constriction in material shingle manufacturers with 2-7% increases and aavailability. Roof Hugger, like many other fabricators, fourth manufacturer following with their increase.? has found it necessary to pass along a portion of these A key component used by most manufacturers ismaterial increases. We have done our best to minimize asphalt which is seeing its own price increases.the increase and we are carefully monitoring our According to Bud Polston of United Asphalts, there areinventory levels.?widespread price increases with asphalt due to how itThey continue, ?Please take note that with the is processed. The demand for gasoline has beenuncertainty of steel costs, pricing will be good for a uneven in 2020 and jet fuel has seen a huge decreaseperiod of 14 days from the quote date and subject to in demand. According to Deloitte Insights, ?Demandreview, thereafter, please qualify your proposals to for gasoline has risen as more cars have returned toreflect these limits. Roof Hugger is still committed to the road and as shops, retail stores and restaurantsproviding the best customer service and product have reopened. However, demand for jet fuel hasquality as we have always been known.?remained anemic, with U.S. demand still half of its pre?COVID-19 levels, as many people defer air travel." Now more than ever a strong relationship with your The lack of demand for jet fuel has a trickledown effectmanufacturers and distributors is essential. Good on the amount and cost of producing/ refining asphalt.communication on upcoming material shortages, According to information gained by United Asphaltsallocations or price increases is crucial to roofing from a refinery source, "Covid related lockdownscontractor?s business.nationwide are impacting primarily gasoline and jet fuel (both lower demand and lower pricing). Most refineries cannot make asphalt and resid (oil products that remain after petroleum has been distilled) without also making gasoline and jet fuel and it appears that black oil production across the U.S. has decreased as a result. This is leading to higher market prices for resid and asphalt on account of the decreased production and to incentivize more production. Although the market price has increased, it is still not high enough to offset our incremental production costs of asphalt and resid.?www.ohioroofing.com 8'