Supply Chain Issues with Spray Foam

Why is the Cost of Spray Foam Insulation Expanding?

If it isn’t one thing, it’s another, right? At least it feels that way sometimes.

First, we had the coronavirus, which ended up being a worldwide pandemic. Businesses and schools closed and before you could shake a stick at it, there was no toilet paper, no Lysol, no masks, and then, a shortage of spray foam.

Are you reading this and thinking “What? How did that happen?” you are not alone.

Let me explain why spray foam insulation is experiencing a shortage right now and what that means for the average consumer.

Spray Foam Supply Chain
4 Reasons Why Spray Foam is in Short Supply

If you have wondered why your estimates for spray foam keep increasing, it has a lot to do with supply and demand.

Before 2020, there was a slightly larger demand for spray foam than supply, but not so much that it was an issue. Then, disruption in the supply chain due to COVID occurred and it had a chain-reaction type of snowball effect.

Reason #1- COVID and Transportation Issues

Once the COVID-19 virus became a pandemic, quarantines, lockdowns, and employees becoming infected around the world caused a huge shutdown in the transportation industry. The demand for petroleum also dropped since people were not driving as they usually did. The primary driver of crude oil extraction is gasoline, making less gasoline means fewer byproduct chemicals, such as the ones used in spray foam. One of the problems here is that it can take as long as a year between the extraction of crude oil from the ground and the final packaging of spray foam products.

Reason #2- Supply and Demand

Two large hurricanes hit the Gulf Coast in the fall of 2020, which shut down chemical production for a few weeks. The pandemic, which then hit the world in the early part of 2021, caused a new V-shaped economy, where people began to work from home. This led to a demand for new furniture, home office remodeling, relocations, and new housing starts. This caused a huge demand for urethane-based materials for everything from new housing to insulation to roofing and new furniture. Demand has skyrocketed at a time when oil production has hit its lowest output levels in decades.

Reason #3- Global Demand and Price Increases

Once the economy began to return to some normalcy in the summer and fall of 2020, the demand for cargo ships, containers (both plastic, PVC, and steel), and trucks caused a literal global shortage. Logistics timing reached unheard of 3-month shipping estimates and this, in turn, led to staggering price increases for shipping containers. A 55-gallon steel drum had a mind-blowing 300% increase in price due to the cost of steel. The logistics delays caused on and off disruptions in nearly all industries. To make matters worse, the United States Government imposed a 30% tariff on imports and steel from China.

Reason #4- The Straw that Broke the Camel’s Back

If the above 3 reasons were not enough to set off a catastrophe, the arctic blast that hit Texas in February of 2021 was the proverbial straw that broke the camel’s back.

Refineries in Texas that were found along the chemical belt that goes across the state of Texas and Louisiana were never meant to operate in prolonged low temperatures of “freezer” type weather. This deep freeze led to literally thousands of cracked pipes. Nitrogen is used to purge refinery lines so that they can be repaired but even nitrogen producers were off-line since they also experienced damages due to the weather.

Oil refineries, especially the ones in Texas, are responsible for the production of the chemicals at the top of the supply chain that is needed to create the materials that make spray foam available.

Also, unlike some products, spray foam cannot be frozen and thawed. It is ruined if it freezes and therefore, any supplies that were stored and ready to be shipped are now garbage.

The disruption in the supply chain due to COVID occurred and it had a chain-reaction type of snowball effect on the spray foam industry.

What This All Means

In the spring and summer of 2021, vaccinations are plentiful, but the spray foam industry is critically low on the ingredients that are required to make spray foam. Materials that are being sold are being marketed at incredible price increases.

It is expected that this low level of materials will last through at least 2021 and possibly into the early part of 2022, assuming no other tragedies or extreme weather problems raise their ugly heads.

To add insult to injury, no one should expect prices to return to 2019 levels. They might, but it seems to me that prices that go up and stay that way for more than 6 months rarely return to “normal”.

What You and I Can Do About This

Unfortunately, we can’t control the weather or viruses. What we can do, however, is to be patient and take things as they come.

I’m hoping material prices do not increase any more than they already have, but I promise to keep my prices as low as I reasonably can still remain in business.

For the consumer (that would be you) if you have been considering spray foam insulation for your home or business, I would suggest that you don’t wait, hoping that the price will drop.

Installing spray foam insulation now will not only result in the best possible savings for you (material wise) but it will also save you a substantial amount in your upcoming energy bills.

Spring and summer weather is around the corner and if you want to save a ton of money on your energy costs while staying completely comfortable, you should call Chicago Green Spray Foam Insulation for a quote today.

As I always say, Comfort is only a FOAM CALL AWAY! 847-987-3626
Call us today and you can be cool and comfortable tomorrow.

About the Author, Tom Decker

With ten years of experience selling spray foam insulation in Chicago, Tom Decker is THE person to call and the Chicago Green Insulation is the organization to hire when you are looking for top notch quality and performance as well as someone who can deal with the needs of code officials, home owners and general contractors. Call the others in Chicago, if you are interested in the cheapest price, call Chicago Green Insulation if you are interested in using your dollars to make Chicago a better city for all of us!

Sign Up for Tom’s Newsletter

Your email is safe, I never spam!

Call Now ButtonClick to Call
Share via
Copy link
Powered by Social Snap