Builders Aggressively Rebidding Projects, Puts Pressure on IBP and OC

Research evidence excerpt

Builders Aggressively Rebidding Projects, Puts Pressure on IBP and OC

USA | Building Products EquityJulyResearch20, 2026

Builders Aggressively Rebidding Projects, Puts

Pressure on IBP and OC

Our contacts note insulation prices have been stable, but with the production

builders bidding communities aggressively when contractors attempt to raise

prices, it limits OC's ability to raise price, and could pressure margins for IBP and

QXO. There's some inventory to clear out, so OC could see less of a seasonal

uplift in demand in 3Q.

Insulation demand remains weak. Our contacts noted insulation shipments were down ~MSD%

in 2Q26, an improvement from 1Q26 weather related declines. Demand has improved modestly

March-June, but momentum softened in July, a seasonally slower month for many producers and

distributors are working down some inventory that bought ahead of the June/July fiberglass price

increase. There's possibly a month of inventory build in the channel to be worked down, and with

a muted 2H26 outlook, there could be less of a seasonal uplift in activity this fall. While lapping

easier comps, our contacts are expecting ~flat 2H26 volumes and any recovery likely gets pushed

out to 2027.

Insulation prices stable, but traction on price increase seems unlikely. Our contacts note pricing

for fiberglass insulation has been stable in 2026, but with the large homebuilders aggressively

rebidding projects, especially when contractors go out with a price increase, it's exerting pressure &

limiting the manufacturers’ ability to pass through higher costs, notably chemicals & transportation.

Freight surcharges for insulation can be passed through at a quarterly lag. Following an extended

outage, our contacts note CertainTeed's KC facility (~5% of supply) is producing blowing wool,