It has been 2 years since the pandemic that caused the market to become unstable; a year since the winter storm Uri, that caused delays, damages, and blockages on the Gulf Coast; a year since the Suez Canal blockage that caused massive delays and maritime traffic in the world's biggest trading lane; and 3 months since Russia's invasion of Ukraine started. 

All these series of unfortunate events continue to rattle the market and create an imbalance in demand and supply, not just in the construction industry but in any industry in the world.  

Prices have been increasing left and right, faster than consumers can keep up with. Some industries are hit harder, garnering a double-digit price increase on raw materials and when a price increase starts from the global source of raw materials, this creates a domino effect on almost all goods in the market. 

Companies around the world are on eggshells trying to manage their prices and absorb the shock before it reaches their customers. However, the market remains unstable and uncertain urging them to find other solutions. 

The Price-Lock Trend 

When the market was more stable, prices and quotations remain valid for a longer period of time. It could last for months or even a year. 

Now, in order to adapt to the fast-increasing prices in the market, companies have introduced Price-Lock strategies to manage the expectations of their customers. There are 2 common ways that companies do it: 

1. Buy Now, Deliver Later 

This idea is synonymous with hoarding, except customers won't have to store the materials themselves and can have the goods delivered as and when needed in the future. However, this may not work in most industries, and depending on the area/county you're in, government regulations may differ. 

2. Short Price Validity Period 

This method is becoming more common recently. Instead of 2 weeks or a month, quoted prices only last 3-7 days at maximum. This urges customers to decide faster on their purchase in fear of another price increase.  

Similarly, SP Group has recently applied a 5-Day Validity rule on quotations. If a customer decides to purchase at a price that was quoted beyond the 5-day validity, our account managers will check the market status first before it can be settled at the same price. 

Keeping a close eye on the market will help you decide whether the quoted price today is a good deal or not before another increase happens. If you have questions on your recent quotations, call +44 28 9442 8611 or email hello@s-pgroup.com for assistance.