Construction material prices on the rise

April 3, 2007
COMMERCIAL

Metals hit the hardest for glass industry

While prices for glass have remained steady for the past several months, recent predictions from the Associated General Contractors of America in Arlington, Va., indicate price hikes are coming.

Labor costs, inflation and rising fuel prices will continue to drive construction material prices up, according to predictions from Kenneth Simonson, chief economist for the AGC.

“Last August to January, many material costs had started to drop,” Simonson says. “But in the last couple of months, we’ve heard of a variety of price increases. We’re back to the climate of explaining to owners why costs are going up so much.”

The glass industry will be affected by increases in metal prices—mainly aluminum—as well as predicted jumps in diesel fuel, petroleum and natural glass, Simonson says.

Increasing fuel and energy costs “will certainly affect the cost of production and delivery, as well as even operating equipment to lift windows into place,” Simonson says.

The industry is already feeling the high metal prices, says Scott Johnson, purchasing manager at Agalite Bath Enclosures, part of Hartung Glass Industries in Seattle.

“Aluminum, brass, copper—everything is going up,” Johnson says. “That’s why parts of bridges and manhole covers are disappearing, people are pulling copper wire out of buildings. The scrape rate is so high, because the prices have gone so high.”

The cash price for aluminum on the London Metal Exchange closed at $2,791 per ton March 30, up 21.9 percent from Jan. 2, the first day of trading this year. Copper reached $6,939 per ton and nickel $45,400 per ton March 30, up 11.9 percent and 35.4 percent, respectively, from the start of the year.

Despite increases in raw metals, companies say they haven’t seen price increases from glass suppliers. However, some glass shop owners are predicting a hike in price soon.

“Our glass fabricators for [insulating glass] and tempered glass are telling us they’re anticipating an energy surcharge,” Evans says. “They are also saying that we haven’t had a [glass] price increase since last summer, when the increase was 7 percent. So, we anticipate another one, if not in the second quarter, than definitely in the third.”

Visit www.lme.com for more information about metal prices.

— By Katy Devlin, e-Newsletter Editor, e-glass weekly