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I Forge Iron

Price of building materials


SinDoc

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We had our typical start of the week meeting at work today (I work at an electrical supplies distributor for those who don't know) and the topic of soaring prices came up. 2 years ago we could sell a 500' spool of 12 gauge THHN for roughly $100US, however with todays pricing, that same spool is now over $200US. Market projects are stating that with this drastic upward trend in copper price, it is entirely feasible that within a few years copper could be as much as $14 per pound! That means that same exact spool we sold in 2019 for ~$100, will be closer to $600! 

Now imagine that price hike on Romex wire for houses. a 250' coil could be close to $200. That plus the cost of lumber and other materials could add 10's of thousands of dollars to the cost of building a home. Say for example a house you could have built in 2018 for $300k could cost $350k or more just because of the added material cost. Copper is going nuts and lumber right right behind it or tied with it.

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There's also the fact that a lot of people who might have spent their disposable cash on vacations ended up stuck at home during the pandemic and therefore put that money into home renovations and additions. I expect prices will go back down once that particular increased demand goes away.

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I finished all the "Honey Do" jobs like new siding, storm windows, insulation, added a patio, etc last summer rather than vacation so we are good except they raised the assessment of my house $25K because if it, so my property taxes went up

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Manufacture was also hit by the lockdown and a grounded freighter blocking the Suez canal. I picked up a replacement 6' ladder the other day and 3/8" plywood was on sale for $70/sheet. 

I'm thinking once supply catches back up with demand prices will fall. Not to pre-pandemic levels, there are lots of loans, payments, etc. behind but it'll come down. At these prices competition will be picking up and drive prices down.

Frosty The Lucky.

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I think its a myriad of things causing it. Copper is being pushed because of a strike in one of I believe the largest mines. A lot of factories were forced to shut down for a period then came back at reduced capacity, all while most demand didn't drop but if anything went up. Now the plants are playing catch up and are struggling to get caught back up. One of our suppliers is over a million in the hole on single pole 20A breakers, something they should NEVER run out of, let alone be a million behind.

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