From <a href="https://www.zerohedge.com/"Zero Hedge
PVC Prices Hit Record High As Homebuilding Costs Soar
The cost of a key building material used in everything from vinyl siding to gutters to windows and doors to flooring to plumbing jumped to a fresh record high.
U.S. Gulf Coast export PVC spot prices printed $1,900 per metric ton for the week ending Sept. 10, up more than 30% since June.
According to Bloomberg, the latest jump in prices is due to Hurrican Ida disrupting 60% of the U.S.’ polyvinyl chloride production. The hurricane delivered a devastating blow to petrochemical factories on the Gulf Coast as buyers go elsewhere for plastics.
“We’re now hearing some buyers there are looking to Asia for supply at the moment,” Jeremy Pafford, head of North America’s Independent Commodity Intelligence Services. “Expectations are that the tight supply situation will continue for several weeks.”
Homebuilders and homeowners cannot catch a break when it comes to the cost of materials. Earlier this year, lumber jumped to new heights on supply chain woes but has since plunged, though it remained more than double the prices from COVID lows.
D.R. Horton, the largest homebuilder in the US, warned Monday that “significant disruptions in the supply chain … along with tightness in the labor market” will dent the full-year sales forecast. The update comes as similar warnings from homebuilder PulteGroup earlier this month warned that “shortages for a variety of building products, combined with increased production volumes across the homebuilding industry, are directly impacting our ability to get homes closed to our level of quality over the remainder of 2021.”
“Runaway construction cost growth, such as ongoing elevated prices for oriented strand board that has skyrocketed by nearly 500% since January 2020, continues to put upward pressure on home prices,” said NAHB Chairman Chuck Fowke.
“Policymakers must address supply chain bottlenecks for building materials that are raising costs and harming housing affordability,” Fowke added.
There could be more rallies ahead for PVC prices as there is no clear timeline on when petrochemical factories in Louisiana will come back online. One thing is sure: the cost of manufacturing PVC has risen due to soaring natural gas prices.
As for now, the cost of building a home continues to rise, and it appears that inflation is becoming more persistent, discrediting the Federal Reserve’s “transitory” narrative.