Glass shortages were a major problem for the fenestration sector last year. Of course, much of the entire supply chain was under immense pressure and 2021 was littered with shortages of all sorts of products, from PVCu profile, hardware, decorative glass, spacer bars and more. Seemingly, nothing was spared.
However, I feel like hope is on the horizon for at least one product group this year, and that is glass.
Glass shortages could end
The fenestration sector was hit with various problems all at the same time last year. Demand, as we all know, was far higher than could have been predicted. Many of the supply problems last year, including in the glass sector, were down simply to demand versus supply. Too much demand, and not enough supply. I have been told that major glass producers were caught on the hope with regards to demand and so stockpiles were quickly put under pressure.
Raw materials for certain glass products, such as laminated glass, were also in short supply due to factory problems. For example, in Texas in the US, a plant that produced some of the component materials needed for laminated glass products had to close due to extreme weather in February of 2021. They suffered a huge freeze which caused chaos across the state.
Then, to top it all, two float lines were down for a significant period of time. One at Guardian Glass and one at Saint-Gobain. Both were undergoing maintenance and upgrades at the same time. Just as demand for glass was rising. There could not have been a worse time.
However, progress on all those fronts appears to have improved. No extreme weather events have caused problems at factories that we rely on. There are tentative signs that demand might be plateauing, albeit at a higher level. And both float lines that were closed at Guardian Glass and Saint-Gobain are back online and producing glass once again. So even if demand is very strong this year, at least we have our full complement of float glass factories back online.
2022 will not be without its problems on the glass front. If demand remains high then it’s still likely to put some pressure on suppliers to meet that demand. Consider that we’re still in January and seasonal swings upwards in business activity will begin shortly. If you think you have had a busy start for January it may be that it’s only going to get busier as the weeks roll in. A lack of labour in key areas such as transport may also impact the availability of glass. Just as we saw with the fuel crisis, there may be plenty of it, but if there are not enough people to get it from A to B then we’re going to have problems.
Overall I can see the supply situation with glass becoming more stable during the course of this year. There is, however, one other factor we have to consider when it comes to glass, and that is energy.
Energy costs will bite
In April, the price cap for households on what they pay for gas and electricity is about to shoot up. Some reports put it at more than a 50% rise. This is going to cause huge problems for millions of people up and down the country.
You may or may not be aware that for companies there is no such price cap. So although homeowners are paying a lot more than they were before for their energy, the situation is even worse for businesses. They have felt every increase from the start, and its starting to have a huge impact on running costs. For example, a recent report on DGB explored the story of Pilkington and their monthly energy bills rising from £1m per month to a whopping £8m per month. That’s nearly £100m per year just on energy alone.
Pilkington is of course not alone on this front. Every manufacturer of every kind has seen rises of similar amounts over the last year or so and is one of the contributing factors to overall inflation rising fast in the UK. I have argued that the entire supply chain has to pass down these price increases all the way to the end-user. In our case, the homeowner. The supply chain is not in a position to sacrifice profit margins to absorb the vast majority of these increases. It’s too much and would cause business casualties across the board. Is this ideal? No. Any further price increases that people have to pay for goods and services will only push the overall inflation rate higher. But this is the tricky situation now we all face.
With regards to glass supply, perversely, higher fenestration costs are likely to cool demand for new windows and doors somewhat during the course of this year, which will actually aid glass companies in getting back on top of their supply demands. That balance can tip too far in the other direction though and what we don’t want to see is a sudden slamming on of the breaks by households.
Glass shortages, I believe, will become fewer and further between this year. I feel the fenestration sector is in a better place than it once was and is better equipped to manage higher demand levels that we still generally expect this year.
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