A General Pricing Announcement to All MBS Customers

Over the past few months our industry has faced extremely volatile pricing, an unprecedented phenomenon.   Many of these price increases are received with very little advanced notice and affect virtually every building product that you use and MBS distributes. The frequent increase in pricing stems from a surging commodities market, most notably oil.  The price of oil is considered a remote or market factor in that it affects most businesses across many industries.  Like many others our industry has felt the negative impact of these surging prices, this impact is felt by everyone including the manufacturer, distributor and you, the contractor.

The price of oil affects everything from raw material costs, to transportation costs, to manufacturing costs, which means pricing will continue to fluctuate while the commodities market remains volatile.  Therefore, it is very important you quote with caution. 

• Be sure that you have updated pricing from your MBS sales representative.
• Do not extend quote dates as some products have been increasing on average of twice a month.
• Include materials price increase clauses in your quotes to ensure you do not lose money on a job. 
• We receive price increases with little notice, so be sure to keep in constant contact with an MBS branch representative to be sure that you have up-to-date, accurate pricing. Other rumblings that we are hearing is that a possibility exists, in some product categories that prices may be quoted at the time of shipment…not order placement!! Needless to say, we are in very volatile times.

We understand it is our job to help you succeed and to give you every advantage possible in the marketplace.  In an effort to do so we will make certain that we do everything we can to effectively manage our inventory and promptly inform you of price changes.

At this moment oil is trading $138.63 a barrel.  We are not in the business of financial analysis and the truth is that not even the “experts” really know what will happen to the price of oil over the next few months.  However, we can see that the oil futures market is currently a broken model and not reacting solely on supply and demand as it should.  The radical shifts in price not only from week to week but sometimes $3-$5 within a trading day is very uncharacteristic of the effects of supply and demand and are much more characteristic of a speculative market. 

History has shown that markets like this will fix and stabilize over time.  Where it will end up and when it will happen we have no way of knowing, so until then, we encourage you to take steps to improve the efficiency of your business. 

• Again, quote accurately, work more cautiously to avoid wasting material, work to reduce your operating costs and keep close contact with your sales representative to get updated pricing.

We will continue to do everything we can to help your business grow and succeed.  We thank you for your business and your understanding of these difficult times. Please note chart below.