Skyrocketing prices pressurize water projects

A perfect storm of international factors may throw a wrench in water infrastructure projects for the foreseeable future.

Suppliers said prices for water main materials were volatile and skyrocketing.

“The price is almost five to six times what it was 15-18 months ago for PVC,” said Alex Regenos, operations manager of Quad Cities Winwater, a regular supplier for water projects in Washington County. “Imported iron and steel went up 23% overnight from a new tax policy put into place in late April by the Chinese government, limiting supply even further. Copper is three times what it was. It’s crazy.”

No two suppliers blame the same lead factors, but a few common concerns include transportation labor shortages, shipping disruptions caused by the pandemic and disruptions to PVC production facilities in Texas since damage to the state’s electrical grid in February.

John Balmer, CEO of PSC Distribution in Iowa City, said PVC prices had three or four distinct spikes in 2021 alone, a trend that’s complicated the bidding process for municipal contracts.

“People are trying to factor it in as they realize nothing is stable,” Balmer said. “Or they’re putting in bids (that are) only good for 30 days, things like that. You can’t commit yourself to any lengthy period of time on these bids.”

Balmer said the soaring prices may give buyers second thoughts about water and sewage capital projects.

“If the prices get much higher, I think you’ll see some sense that people will put up a stop sign,” he said. “But right now, that’s not happening.”

On the buyer end of things, it’s not yet clear whether material shortages will delay, compromise or cancel water infrastructure plans.

Riverside has a number of projects that may be affected.

“It’s in the budget, but the budget’s just based on numbers of prices from last year,” Riverside City Clerk Becky LaRoche said. “It may be we don’t even get it done until next spring, or we just won’t do as much. We’ll see how the numbers shake out, the council hasn’t made a decision yet.”