Here’s a scenario that many of you probably haven’t considered, but in reality could well be possible by the end of the year.
As we are all well aware, Iran is being a royal pain in the arse at the moment. They have a nuclear power program that the West suspect of being a veil for atomic weapons which is causing great tension in the region. The EU and US have imposed very tough sanctions on Iran, and in response, Iran has threatened to close the straight or Hormuz, meaning 20% of Europe’s oil supply would be cut off. Then you have Israel on the brink of pre-emptive strikes on Iran. Syria isn’t looking to great either at the moment.
You’re probably wondering where I’m going with this. Well, if there was war with Iran at some point, and it’s probably not that far away, as soon as the first shot is fired, you can bet your last quid that oil will shoot through the roof. And therein lies the main issue. PVCu is derived from oil, and when the price of oil goes up, there is going to be an effect felt further down the production line. A couple of dollars on top of today’s price isn’t going to make that much of a difference. But a war in the Middle East could cause oil to sky-rocket to to unsustainable levels. It could cause the raw material price of PVCu polymers to jump significantly, making our windows more expensive.
Then there is the fuel aspect. When oil goes up, petrol and diesel goes up. But if it rises to crazy high levels then you can wave the spending power of the general public goodbye. People are already cutting back on their driving.
These two effects could cause a big negative impact on our industry. You’re probably thinking ‘urgh, here he goes again’. But think about it. Diplomacy isn’t working to resolve the issues, Iran has said it won’t stop it’s nuclear program and Israel has already said it will strike before they get to the point of no return. Whether you like it or not, the most likely outcome over the next few months is conflict, and it could have very wide reaching repercussions.
