High Cost of Diesel May Result in Price Hikes, Expected to Decline in Fall

Charlotte, NC, April 13, 2026-"The biggest issue coming into earnings for specifically the aggregate players but also the downstream operations and, to a certain extent, cement, is diesel costs,” reports Truist. “These are up anywhere between 30%-40% in March, given moves in crude oil in reaction to the war in Iran. Finding where crude settles is still really tough, but in just about any short-term scenario, we expect to see these costs to remain elevated for the material producers. We have lowered our estimates on the group for this reason in 2Q26, as described above.

“We suspect that these elevated costs will push the aggregate players to announce price increases in the upcoming months to offset these costs. The industry has a great track record of realizing increases and we believe they will be successful. In our view, this will cause margin pressure to abate in 3Q26 and equalize late in the year.

“We doubt the Middle East issues will last long-term and we suspect energy prices will fall. This will not lead to aggregate selling price declines, showing once again why investors like the aggregate businesses so much as the spread expands. We have modeled this in calendar 2027 but note it could come much earlier.”