2022.FORT March Newsletter

General Availability & Price Update

We have all been looking forward to the end of COVID restrictions, so that the economy can start to rebalance and settle back into a more consistent pattern.

In general terms availability has been improving for many months. FORT were reaching the point where we felt that we could scrap the ‘A Word’ and move more towards product advice... then Russia invaded Ukraine.

So, what is the impact of this on building products?

Quite simply, we do not really know, but we’ll soon find out. There are so many sanctions and positions to unscramble as multi-national companies reset their positions. It is an enormous mess. Our best guess at this stage is that many building materials are going to run into serious supply issues.

Let’s look at current market rates:

Containers: This seems to have stabilised at the same rate for a few months now. See here. We’ll have to see what the impact is over the next few months, but as ever, these high prices affect many building products.

Steel: The rise in price continues. This was inevitable and it’s likely to go on from here, especially as energy costs rise and fold into production costs.

Timber: As this chart shows, the US lumber price is almost back to an all time high, way, way beyond what has ever been seen before. Russia is a huge exporter of timber into Europe and therefore the impact on supply will be devastating. We can guarantee that prices are going to rise, unless the war ends very soon and sanctions are lifted.

Inflation: The current Russian/Ukrainian war will create yet more inflationary pressure. Already running at over 7%, RPI could well climb a lot further.

FORT continues to hold good stocks and are working hard to ensure that we're doing everything we can to limit the impact of this situation on our customers, but the feeling is that we're in for a rough ride.

Use of Red Diesel - New Legislation

As we have been warning for many months, the new legislation on red diesel is almost upon us – it’s going to affect us all.

This is going to be a major change across our entire industry. We all use significant amounts of diesel and from 1st April 2022 our sector cannot use ‘Red’ – we must all use conventional ‘White’ diesel, that has a nett extra duty of £0.47 per litre (that’s £2.09/gallon!).

The government argument is that this is all about reducing hydrocarbon use, but unless someone has a magic formula, all we’re doing is swapping over to road diesel. The incidental issue is that the government expects to get around £1.4 billion in extra duty…

There will be a lot of concern around fuel security and theft. We also all need to have cleaned out existing machinery and filters before 1st April.