With the price of Benzene at about a 5 year low (according to Platts Data), does anyone out there think the sticky pricing theory could break and see a reduction in the cost of blocks.  They sure were fast to implement increases due to spiking benzene prices through the summer, however most raw materials and commodities have dropped dramatically and I sure would like to see a pull back in prices to help all of us in the ICF world become more competitive.  Just a thought and was wondering what others thoughts on the subject might be?

Thanks,

Dave

p.s. I'm a distrubtor/installer of ICF's

Here's one of the articles I was referring to:

European benzene drops to five-year low testing US$500/mt level [ 24 Oct, 2008]

European benzene prices continued to fall for the fifth consecutive day this week, sinking to a five-year low under the weight of weak sentiment and recessionary fears, which also pushed crude prices down.

After crude plunged this morning despite OPEC's announcement it would cut production, sentiment in the benzene market also took a bearish turn.

Spot prices fell $40/mt Friday as buyers of October and November-delivered barges moved down toward the $500/mt CIF ARA mark, while offers were seen at $520/mt CIF ARA.

These price levels have not seen since December 2003, according to Platts data. Today's drop means benzene has plunged $943/mt since the July 14 high of $1,453/mt, according to Platts data, a nearly 65% decline.

The bearish sentiment led traded activity to thin dramatically, with no trades reported Friday morning.

The market staged a recovery in late trading Thursday as buyers emerged, following a rise in crude prices. A 1,000 mt December-arrival parcel traded at $575/mt CIF ARA, Samsung to Ineos Olefins.

Energy markets were boosted yesterday by expectations OPEC would decide to curtail production when the cartel met in Vienna Friday. However, today's announcement the cartel would cut 1.5 million b/d from the beginning of November was overshadowed by recession fears and the euro's fall against the dollar and other currencies.

The dollar continued to strengthen Friday, hitting a two-year high against the euro and a six-year high against the British pound.

Source: Platts.com

Sure oils dropping, it's dropping even slower at the pumps. ICF manufacturers have inventory of expensive product to get rid of first before they start dropping there prices.

Actually, my supplier has not had a price increase in excess of 2 years. Back when oil was similar to todays prices.

You want to be competitive, what are you competing against? The ICF system has it's own characteristics which set it different then other building products out there. If you are selling based on price, well you are selling it wrong. You should be selling the system as a better way to build, not saying I cost XXX more than other building systems.

You don't sell Ferrari's by saying it's 10 fold (or more than) a Ford Escort. Both get you from point A to B, so what is Ferrari offering? Answer that and it will give you a different outlook on selling ICF's.

Chris

with all due respect I do know that ICF's have different characteristics than traditional building.  I do know it's a superior product.  However in the real world budgets are in place and every dollar is being competed for.

I also seem to see quite a bit more Fords on the road than Ferrari's.  Sure everyone would like one, but in the REAL world, money is always an issue.  Before you go on and tell me I don't have a correct outlook on ICF's you might want to know more about my business in the future.

I was simply making a point about the crashing price of benzene that is a key component in ICF's

 

Dave

Dave;

The problem with budgets is they are usually unrealistic, they are written by someone who doesn't know about all the costs or procedures. Look at someones budget and there is always a line item for framing - materials, framing - labour

No where is there a line item for estimated time (Which effects construction loan money), temporary heat (some areas, certain times of year), people ignore the fact we are already insulated (Which is a few thousand dollars). Most soft costs in a budget are just fabricated numbers that worked for someone else and 'should be close', hard costs change from the inevitable price increases throughout the process of building a house.

So in regards to budget, my opinion is if someone is setting their whole house building process up and treating the budget as the bible, they are unrealistic and not a client for me, so I say don't waste your time, let someone else have the stress. We build a better product with ICF's, but North Americans understand wood.

As for your point on the crashing price of benzene, it is a commodity item, unfortunately the ICF industry is so far down the line on the use of it's products we will not feel the reduction for some time if any at all. I see fuel prices dropping, but a quart of oil still stays the same price, what gives there?

As a side note, I put together a decent commercial project using ICF's, the landlord decided at the last minute to see where he could save, my number was a big chunk of the 'budget'. Of all people the mechanical engineer stood by me and said to the landlord, his architect and GC, go ahead and try and remove it, use wood or steel, but I want to see what is proposed and it must meet or exceed the values of ICF...needless to say after getting that one figured out ICF stayed on the project. Bottom line, it is getting there and people such as this M.E. understand it, ICF is not more expensive when you try and compare everything on as level a field as possible.