The global building materials and flooring industry has been no stranger to changes over the past decade. But the US-Iran conflict began in late February 2026 have been testing the resilience of every player in the supply chain, manufacturers, distributors, contractors, and developers. The landscape has changed, and fast adaptation is key to survival.
Here is a breakdown of the current crisis, how it impacts different parts of the building material industry, and what professionals can do to gain stability.
According to the CIF’s Q1 2026 Construction Outlook Survey, even before the Iran conflict, 79% of construction firms reported yearly increases in raw material costs in Q4 2025. Since the outbreak of war on February 28, three major pressures have occurred:
Oil has surged past $90 per barrel, with diesel prices in the US up 34% since the conflict began, surpassing $5 per gallon. Every $10 increase in oil prices adds 3-5% to steel production and 4-6% to PVC costs.
by Howmuch Net Visual CapitalistThe Strait of Hormuz is now a conflict zone, through which 20% of global oil and 30% of LNG passes. Major carriers are adding conflict surcharges, changing vessel routes, or pausing services. This, combined with ongoing Red Sea issues, adds 14-20 days and 30-50% in shipping costs for goods from Asia to Europe and the Middle East.
by EIAGas shortages impact the availability of many materials, especially those that are energy intensive. Meanwhile, petrochemical-based material supplies such as PVC are tightening and rising price.
The rising cost of oil directly increases the price of petrochemical-based material like PVC. Additionally, flooring is highly sensitive to freight and fuel surcharges.
Distributors now face higher landed costs while trying to maintain competitive pricing. Some are paying additional charges themselves for existing orders. Others have already received surcharge notices and must pass them down the channel.
by Elements Visual CapitalistCertain product categories are being hit even harder, particularly those that require massive energy input. Ceramic tile production is a prime example. Hundreds of factories in India’s ceramic hub, Morbi, have already stopped production due to gas shortages.
SPC flooring and wall cladding supply is among the many building materials that have been impacted by the current global conflict.
PVC is a major material for many parts of SPC floors and wall panels, such as rigid core and wear layers. PVC is a petrochemical product. When oil prices spike, PVC prices follow. Even if prices do not spike further, availability is becoming uncertain. PVC suppliers may declare force majeure or reduce output, which can have an impact on SPC manufacturing.
Moreover, fuel-driven logistics cost increases are affecting domestic material transport, inter-factory transfers, and warehouse-to-port shipments. This change also impacts the cost of SPC manufacturing.
If you are a flooring distributor or a building contractor, you are already feeling the pain through higher quotes and longer lead times. However, proactive measures can mitigate the damage. Here are 5 strategies to control costs and maintain stability.
In an unstable market, waiting for prices to drop is not a sustainable strategy. Most analysts expect raw material costs to continue rising in 2026. This inspires distributors to move away from just-in-time purchasing and place larger orders to secure current pricing.
One thing you can do is to communicate your 3-6 month forecast to your supplier now to negotiate prices, but suppliers need visibility to help you.
Many construction contracts do not clearly define war or geopolitical disruption as a force majeure event. This can lead to disputes over who bears the cost of delays or rising prices.
We advise all new projects to insist on material price escalation clauses. These should explicitly tie cost adjustments to factors like oil prices, PVC prices, or shipping freight rates.
One thing to be aware of is not to assume your standard contract protects you in this special circumstance. You can add specific language covering conflict surcharges and fuel surcharges to avoid being forced to absorb unexpected costs.
Planning your shipment is increasingly important with shipping route disruptions and uncertain container availability.
Businesses can combine LCL (Less than Container Load) shipments into FCL (Full Container Load) wherever possible. This reduces the risk of containers being bumped to the next vessel and lowers per-unit freight costs. You can work with your supplier to use more stable shipping routes rather than chasing risky, faster routes that may face sudden closure or surcharges.
Fuel is a core driver of costs. Your ROI and project viability can be specially impacted by any impact, especially for smaller companies and those in sectors reply heavily on import.
One major advice is to review your financial models for projects starting in Q3/Q4 2026. Assume a 15-20% increase in material costs and a 4-week extension on lead times. If the ROI of project becomes infeasible, negotiate with the client now.
When freight costs are rising, one of the most effective strategies is to choose products that deliver the same aesthetic with lower shipping expense. For example, SPC wall panels offer a realistic stone and tile look, yet their shipping cost is only 20% that of ceramic tiles. This creates significant savings for both distributors and their customers without compromising on design.
The war in Iran, oil price spikes, and shipping disruptions are structural shifts that will define 2026 for the building material industry.
For distributors and professionals, the path to stability is partnering with reliable suppliers who offer transparent communication and share the burden of navigating this chaos.
STEP GUARD is committed to supporting our distributor partners and their customers through this period. By adjusting procurement strategies, tightening contracts, and consolidating logistics, we can together turn this challenge into an opportunity.
Contact our team to stay tuned for weekly updates on freight indices and raw material costs and discuss price and inventory for 2026:
STEP GUARD: I’m here for you, from floors to walls!
Email: info@stepguardfloors.com
WhatsApp/WeChat: +86 177 3606 8607
