Price of bricks set to increase

Materials prices are set to increase significantly as manufacturers face the prospect of soaring energy and hydrocarbon prices.

Energy prices have risen by approximately one-third since January, after massive price hikes last year. Wholesale gas prices have risen 35% and electricity is 33% higher than in January.

The rises have affected brick companies, which have faced a slow start to the year. Baggeridge Brick last month (CJ 25 May) announced falling profits, and said its price increases have failed to recoup the cost of rising wholesale gas prices.

Energy can account for approximately 20% of the cost of bricks using materials such as hard firing clays.

A Hanson spokesman told CJ that the company has to pass on the increases. “We’re over a barrel in a way. We need the energy to make the product, and therefore we need to pass on the cost to the customer. We’ve had to put up the prices of most of our products,” he said

An Ibstock spokesman said passing on prices is a tough decision for brickmakers, which have faced a slow start to the year. “It’s a very volatile market, and it’s moving significantly upwards. In terms of manufacturing, energy is one of the key things that affects costs. We’re watching the situation and how things are moving. From the brick perspective the market isn’t as buoyant as it could be. People are going to play it really cool.”

The Hanson spokesman added that developers should become more aware of the pressures on materials prices. He said: “No one wants to price themselves out of the market, it’s very competitive. In the end it’s the developers that have to pay. They have to write in the cost of materials.”

Asphalt firms have also put up prices to absorb increases in hydrocarbon prices. Hanson’s bitumen costs have risen by £30/t.

Tarmac said it had also increased the price of asphalt. A spokesman added: “While we have absorbed as much of this increase as we can, occasionally such price rises are necessary.”