It seems rather frivolous and frankly quite pathetic to be talking about glass energy surcharges when you consider the carnage and suffering that is being endured by the Ukrainian people right now.

But the war in Ukraine is a conflict that will have effects around the world, and UK fenestration will not be immune from those effects. The key area of concern right now is commodities.

Glass energy surcharges may rise again

It was only last week that I was reporting that glass energy surcharges were on the way back down. Sadly, the Russian invasion of Ukraine is sending nearly all relevant commodity prices sharply higher. Many to record highs.

In relation to glass, the commodity that matters is gas. Pilkington reintroduced the energy surcharge which was originally pegged to the price of oil (if my memory serves me right) but that was then switched to gas. UK gas futures are near all-time highs, European gas futures are at all-time highs and show no signs of slowing. The reason the glass energy surcharge was coming down a touch was prices in the market were becoming more stable to some degree. Now, the war in Ukraine has smashed that reality, sending gas prices soaring. I fully expect energy surcharges to start rising once again.

It’s not only gas. Every major transport and construction commodity is rising fast in price:

  • Oil (Brent) – $113
  • Oil (WTI) – $111
  • Aluminium – $3820
  • Nickel – $28,265
  • Copper – $10,490

All prices correct at time of publication – source:

PVC resin prices are also expected to rise once again. The price of steel has come back down from it’s highs of Q3 in 2021, but have been rising once again.

Whether it’s oil, gas, electricity, steel, aluminium, these price increases will work their way through the supply chain and find their way into our sector. On the transport front, with diesel rising above the 170p mark for the first time, this is going to add further pressures to fabricators and major manufacturers in the UK fenestration supply chain.

Further price inflation

The long and the short of all of the above is that prices will continue to rise in our sector. It has been something we have become used in the last couple of years, but there was a sense at the start of this year that perhaps markets were becoming more stable and the rate of price increases was beginning to calm.

Sadly, due to the war in Ukraine and the shockwaves that is sending through all major markets, I cannot see how we can avoid further price inflation throughout this year.

My previous advice has been to make sure that those increases are passed on down the supply chain to the end-user. In our case, the homeowner. This time around, I would say to stick to that. However, the cost of living crisis is going to get worse, inflation is now likely to surpass 10% this year according to some economists due to the war in Ukraine. Where possible, if companies can look at streamlining their own businesses which could allow them to absorb at least a small portion of any future increases to come, that will help mitigate some of the effects.

It’s not being said in public, but in private I am having a lot of conversations where people are telling me the brakes are being slammed on and things are slowing quickly. On social media, you won’t see that so much, because people and companies want to save face and portray a land of milk and honey at all times. But the reality is that the outlook is changing rapidly and businesses at all levels of the supply chain need to very quickly look at their own operations and see where costs can be trimmed to ride this very tough period out.

If inflation does surpass 10%, that would be the highest rate since 1981. Every day these various crises grind on, the more unstable the economic environment becomes, which leads to a loss of consumer confidence. This is a very serious moment in time and the business side of our sector has to be agile to the effects that will arise.

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