Iran War causing pool industry price pain

The repercussions of the war in Iran are being felt around the world, following the blocking of the Strait of Hormuz, through which 20 per cent of the world’s oil and liquified natural gas flows, as well as 30 per cent of the world’s fertiliser.

Importantly for the swimming pool and spa industry, as much as 40 per cent of polyethylene (PE) and polypropylene (PP) also come from the Middle East, with much of that passing through the strait.

Since the blockade, supply of these petrochemicals has been severely restricted, and global polyethylene exchange prices have surged by 37 per cent at the time of writing.

The CEO of plastics giant Dow Chemicals, Jim Fittering, told Reuters that global logistics have become uncertain, with up to 50 per cent of polyethylene supply either offline, constrained or being impacted following the events in the Middle East.

These petrochemicals are vital for the production of PVC and HDPE pipe and fittings, which are required for most pool installations, as well as resins for the manufacture of fibreglass swimming pool shells.

Vinidex, Polypipe and Pipemakers Australia have told customers that prices for plastic materials had jumped by up to 50 per cent for April delivery compared to March, and as a result, local suppliers have put up the prices of pipe and fittings by as much as 29 per cent for PVC and 36 per cent for HDPE.

On top of the raw material cost, freight and fuel costs are also higher, adding to the price of the finished product.

Significant price increases have already been factored in by suppliers, with future prices uncertain at the moment, but expected to continue to rise unless a resolution is quickly reached.

Shell prices rise

Fibreglass pool shell prices have already risen on the back of a 30 per cent increase in the cost of resin. Further increases are expected.

Grant Craig, CEO of Freedom Pools, says the immediate issue right now is the increase in pricing of raw materials and transportation.

“Prices will definitely increase almost immediately, and the ceiling for this is unknown and changing weekly. Fortunately, at the moment we have good levels of supply for all raw materials.”

On top of those issues, almost all members of the industry are dependent on fuel for trucks, deliveries and onsite machinery, and the increase in petrol and diesel pump prices will affect all businesses.

At the time of writing, a tentative ceasefire was enacted, and there is hope the hostilities will be resolved and the Strait of Hormuz will reopen. However, that eventuality is still uncertain and even if the strait does reopen, it would still take up to two months for the fuel to find its way through Asian refineries to Australia.

One possible positive for the industry amid this turmoil is that, as both local and overseas travel is becoming more expensive due to supply and cost of petrol, diesel and avfuel, more Australians and New Zealanders may be staying at home and using their pools more.

IMAGE: The blockage of the Straits of Hormuz has created a worldwide shortage of fuel and petrochemicals, including many that are used in the swimming pool and spa industry. Image: AdobeStock/AI