Oil prices down, why aren't shingles?

My supplier has always been able to give me a heads up to any upcoming price changes and I was able to book materials out 3 months in advance by just providing him with the square amounts and colour.

OSB and plywood were another matter though. I've seen both jump $6-10 dollars overnight if a hurricane hit down in the states. I would quote a job and tell the customer that the price was based on the day of quote price for sheeting and they had the option of paying in advance to hold that price or pay based on price at delivery to job. Everyone always paid in advance instead of gambling on 3 months down the road. I would always purchase plywood in quantity when the price was low ( six to eight lifts ) and was always able to sell at a profit. Every little bit helps the bottom line.

Lefty, the only quibble I've ever had with the pricing was the volatile market conditions we had in (2008?), when my distributor wasn't given the pricing on shingles until received at the dock. As the situation deteriorated, I had to work very hard to stay ahead of the pricing curve.

To walk my customer through our roof process and pricing, and to then look them in the eye and say that pricing could change before our schedule would permit us to do the work . . . well, it was unsettling to say the least. I've never sold that narrative before, and found it to be very uncomfortable, however truthful it was. The distributor was very good about working with me on holding the pricing on scheduled work.

My grandfather and father (and I, for that matter) had worked for years in a very stable pricing environment. We got spoiled.

I've become somewhat desensitized to today's pricing. As you say, every one of us is in the same boat. Price for profit and let the rest take care of itself.

Does not make much difference what the price is. We all pay basically the same. If the shingle price goes up, so do mine.

Old School has got it right on the refining process impacting the supply of asphalt used in shingles . . . and roads . . . and other numerous applications which have been developed using the dregs of the refining process. Now on top of that, we need to consider that there are other countries increasing demand for these dregs (Brazil, India and China come to mind) who, as their standard of living rises, also demand paved roads and more durable roofing products . . . Then ad the cost of transportation, which at $4/gal diesel is not cheap. I don't for see any kind of a significant drop in shingle prices in my lifetime, but my wife informs me that occasionally I'm wrong . . .

The long and short of this is a dramatic drop in supply coupled with alot of pressure on the demand side. Basic economics . . .

Oh, and as it turns out, crude from the fracking process does not yield useable asphalt for our industry.

Shingles are made from asphalt, and asphalt is a byproduct of the refining process. It used to be way back when that they would have about 5 % left over and it was "good" asphalt. Now they have installed stuff at the end of the line to take out more of the good stuff so there is less asphalt and of a lesser quality for the shingle companies and the asphalt pavers to use. THEREFORE it costs more, not less.

Not that is the line that the shingle companies use. whether you believe that or not is up to you. There are also fewer and fewer companies making shingles as a lot of the regional manufacturers have went by the wayside. the bigger ones have combined too, so we are getting to the point where there will be 3 shingle companies and three window companies and three banks and three insurance com.... Hey, is that really happening?

Personally I think they are all scrambling. Distributors have all bought high so if the shingles are made cheaper there will be hell to pay. How are they going to move all the high priced shingles. Lower prices mean less profit. 20% of $40.00 per square is less than 20% of $80.00 per square. You think it would be a good thing.

I, for one, am surprised shocked and a little pissed.

My vendors don't have anything to say on the subject, but they act like the feel my pain :unsure: :unsure: