Reece among first Oz suppliers to pass growing wartime costs onto customers

Reece (ASX:REH) has become one of the first Australian suppliers to warn customers it will have to raise prices to deal with the war in Iran, starting with a 36% hike on how much plastic piping will cost from next month.

Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.

The bathroom materials supplier on Tuesday warned customers the whole industry is “suffering from a lack of supply of raw material, fuel, and freight options, which is driving costs upwards, adding immense pressures.”

“The degree of pricing volatility we are experiencing in our plastics category is highly unusual… the trading environment remains very uncertain. We know increases like this have a real impact on your business, although we are committed to keeping you informed with regular updates,” the letter said.

High-density polyethylene, PVC, and stormwater pipes are among the many on-shelf Reece products experiencing price hikes through Week 13.

“This issue affects our entire industry, and things are changing daily,” a Reece spokesperson said in a follow-up to the open letter to customers. “Like we always do, we’re focusing on helping our long-term customers who want to understand and plan for what the impact on their business might be.”

Reece owns as many as 600 outlets in Australia, with many based near rural towns where there are limited other options, meaning this hike is basically non-negotiable (and that’s if other suppliers deem hikes unnecessary.)

Reece’s move isn’t a flash in the pan, though, with suppliers all across the country already mulling price hikes to navigate the coming issues. That includes timber suppliers, which will see particleboard and plywood costs increase, which directly weighs on any Australians building or renovating their houses.

One example this Market Link journo has already seen comes from Big River (ASX:BRI), the Aussie timber group mainly based in Sydney. Just this week, Big River chief John Lorente has said there’s been a “direct impact” from Iran already that would see a 10-15% jump in timber prices in late FY26.

The Australian Financial Review this week reported steel manufacturers were also raising prices on some products by between 15% and 25% already.

The last time we saw similar price actions in response to a global issue was during the COVID-19 pandemic, which blew prices out for years.

For Reece, at least, it’s actually led to a jump in overall market cap on Wednesday. Shareholders seem to see value in the wartime price hikes, with REH shares +1.4% stronger intraday after a recent -15% MoM dump.

BRI, meanwhile, is flat; Mitre 10 owner MTS is $2.92, up +1.74%.

Join the discussion: See what HotCopper users are saying about Reece Ltd and be part of the conversations that move the markets.

The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.