Construction and renovation costs are increasing in 2021 thanks to a resin shortage that is impacting the lumber market.
According to PlasticsToday, the collective inventory of the resins are at their lowest recorded levels with “just 17 days of monthly sales, and that was before the Houston storm shuttered 85% of US PP capacity. The added shock has driven availability even lower and sent resin prices screaming to record levels.”
Lac La Biche Home Hardware project manager Devin Tardif said the lumber products most impacted right now are OSB and plywood, both of which are produced by gluing smaller pieces of wood together using resin products.
“Most regions in Western Canada use OSB for wall sheeting and roof sheeting,” said Tardif, noting it is popular because it can be produced in large sheets with the standard size sold in his store being 4’ x 8’.
Tardif said in the last six months, the price of OSB has tripled, putting it ten times higher than it was a year ago.
“The market fluctuates, it’s basically a stock market. One day it can be up, one day it can be down like the US dollar. And that’s the lumber market, but lately we haven’t seen any downs it’s just been straight up,” said Tardif.
He said in Sept. 2020 a sheet of OSB cost $15 and by March 2021 that same sheet cost $75.
According to the National Association of Home Builders, the average single-family home uses approximately 300-4’ x 8’ OSB sheets. At $75 a sheet, it drives the cost of the materials alone from $4,500 up to $22,500, eating into profit margins for builders and driving up the cost of new construction for consumers.
In addition to the sticker shock for their customers who come in to buy a sheet or two for a home project, Tardif said it makes things challenging for the contractors who come in from day to day.
“They buy a sheet on a Wednesday and then we’ve got new stock on Thursday. They come in for Friday’s pick up and they’re 10 per cent higher, and they’re wondering what’s going on,” said Tardif.
He said it makes it very difficult for him and his staff to quote prices for large orders, and difficult for the contractors to give quotes to customers.
“At this point it’s almost a guessing game if we have to lock a quote in for two weeks. We’re basically putting all our work online for something that we have to guarantee that we could lose on in the end,” said Tardif.
Because of the risk increasing prices are causing, he said they’ve cut down how long they will be held to quotes for what they have in stock.
“If it’s something they want today, tomorrow or the next day. We’ll hold that price. If it’s something that they’re looking to do in June or July our price is good for five days,” said Tardif.