Key building material prices increase
July 24, 2018
Building material prices are rising due to the growing international trade war and related tariffs, according to analysts.
In Ontario, the increased cost of steel could add between $10,000 and $12,000 to the cost of an average condominium unit, according to the Residential Construction Council of Ontario.
Rising costs for softwood lumber would mostly affect new single-detached houses and the renovation sector.
As of mid-July, the cost per thousand board feet of 2x4s was $795, up from a 52-week average of $686, according to Madison’s Lumber Report data.
Steel rebar makes up around 4 per cent of the cost of a condo tower—a 25 per cent import duty would add up to 1 per cent in construction costs, according to Altus Group. Canada is a net importer of rebar, the steel used to reinforce concrete in condo towers.
Canada’s construction industry relies on the U.S. for around 25 per cent of the steel it uses, estimates the Canadian Coalition for Construction Steel (CCCS). As of July 9, U.S. rebar was selling for US$836 per metric tonne, up from $700 in March.
Aluminum, often used in window frames, is also facing higher tariffs and counter tariffs, as well as rising prices. In May, as U.S. tariffs were implemented after a grace period, a tonne of aluminum was selling for $2,957.92, up $300 from six months earlier.
U.S. steel prices have climbed by 40 per cent and aluminum prices are up more than 15 per cent since the U.S. announced the tariffs in March.
While the impact of tariffs won’t be fully felt until current inventory levels are depleted, inventory levels could be depleted as early as this fall, according to CCCS.