From: Mark Mitchell, Chair, Cornwall Group
UK-produced glass sent to Europe to prop-up volumes there is threatening supply in the UK.
Some 20% of all glass produced by the UK’s three main float lines is being exported. Further restrictions on glass manufacture in Europe will require further support from UK float lines in the coming months, putting further pressure on supply and price in the UK.
As a result, further glass allocation is on the cards, and glass companies and window fabricators are being warned to prepare for further glass shortages in the second half of 2022.
Glass allocation is something we were hoping to have seen the back of, thanks to all three of the UK-based glass manufacturers now running their lines as normal. But the war in Ukraine is having far-reaching consequences.
Clear glass from Belarus and Russia helped prevent severe shortages in the UK throughout 2021, but this is no longer an option.
Mainland European float glass manufacturers have also said that they may have their gas supplies restricted by Russia by more than 25%, which could lead to some float tanks being closed down, stopping glass manufacture altogether.
This is putting extra pressure on UK glass manufacturers to fill the gaps, which in turn leads to limited supply to UK glass processing companies at a time when demand is still high.
We are already seeing about 20% of all glass UK-produced flat glass being sent abroad to maintain volumes there. These further predicted shortages are only going to add more pressure to the UK market.
The Cornwall Group is expecting two significant price increases before Christmas, in addition to rising energy costs, which could leave glass companies wrong-footed if they are not incorporated into their own pricing structure.
When these price increases come into effect, a lot of companies will find that they are paying double for their glass, than what they were paying pre-Covid.
The volatile glass market is also having a negative effect on relationships in the supply chain, and some glass companies feel their reputations are being tarnished because of the continuing price increases.
Relationships are certainly being strained. And this will likely add to our current woes. But it reinforces our key message to the industry, which is to work with your suppliers to manage price increases and work with the stock that is available. We’ve been in operation for 45 years – not only do we have the experience of weathering the storms, but we have the wide product range to make the most of opportunities that are available.