Less than two years ago the US national average price of gasoline was under $2.00 per gallon, according to the US Energy Information Administration. Remember those days? As of this writing, it is close to $4.50 per gallon, and likely still going up. You probably don’t want to think about that.
It’s the same story across the board in fuels, metals, plastics, housing, cars and trucks, machinery… You name it, the price of it has climbed substantially in that last two years. Unfortunately, FRP tanks and pipes don’t get a pass, due to the price increases of resin and fiberglass used in their fabrication. The prices for those materials, while 80%+ higher than they were 24 months ago, have not climbed as much as some metals, such as stainless steel. It’s hard to feel thankful for that, isn’t it?
Furthermore, the prices we see now will probably look attractive compared to what we may be seeing in the months to come. Predicting the future is always dangerous, of course, but when we put our ears to the tracks, we hear the rumblings of continued price increases, albeit slower than last year. Price stabilization is our current hope and near term price drops seem just like wishful thinking.
Headwinds to price stabilization/decreases include:
- Raw material inputs continue to increase in cost, driven by basic chemicals, energy, labor.
- Lack of competition in raw material supply (imports are down, port logistics are challenging).
- Strong demand continues for composite fabricated products. The corrosion market for FRP pipe and vessels competes for raw materials with other products in high demand: wind blades, FRP infrastructure shapes, RV’s, boats, industrial coatings, etc.
- Lack of supply stability. Without sufficient safety inventory in the supply chain, any disruption upstream ripples through to the consumers.
- Shortages for hazmat transportation (both import and inland) are raising delivery prices
- Fuel for delivery of finished goods
The only way to see any upside in this market is that while prices are still not stable, the rate of increase has slowed from this time last year and we are seeing some improvements in raw material supply. We need to return to an environment where we can reliably forecast price increases throughout the lifespan of a project. Perhaps the recent slowdown in price increases is the first indication we are headed in the right direction.
For more information regarding FRP tank and pipe prices, please contact Diamond Fiberglass at diamondfiberglass.com.
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