Will glass shortages continue into 2021?

With demand continuing to grow not only in the UK but throughout Europe – and with Brexit looming on the horizon – could glass shortages continue into 2021, and what will it do to prices? Mark Herbert, joint-managing director at Mackenzie Glass, takes a look.

Wuhan, the unassuming capital of China’s central Hubei province, went into lockdown at the end of January. The Chinese economy stumbled and plummeted, and suddenly the world was in the grip of the global Covid-19 pandemic.

As the UK went into its own lockdown in March, the Chinese economy was, in fact, returning to an upward trajectory; its recovery gained rapid momentum in April and May, since when China has seen double figure price increases in flat glass prices.

Europe is seeing its own post-lockdown boom, with demand on the continent hitting record highs, in addition to those seen in the UK. The net effect is that UK and European glass manufacturers have already moved to allocation; glass is already in short supply and, with one round of price increases already introduced in August, another is being muted in the autumn.

There are clearly differences between the UK and Chines glass markets but if you’re trying to understand the short to medium term impact that Covid-19 has had, and will have, on glass supply, it’s the best example we have.

The release of latent demand, combined with the disruption shutdown caused to production, put immense pressure on glass supply, prompting significant increases in prices.

We’re trailing a little behind, but we seem to be replicating that model, with exponential growth in demand, disruption to UK and European supply, and product already on allocation, and I don’t see that changing this year and possibly not until Q2 or even Q3 next year.

This has placed particular pressure on IGU manufacturers with 4mm glass, plus many laminates and coatings, already in short supply, plus limited availability of mirror and other specialist products.

As Pilkington’s first regional partner our offering is weighted towards its ranges, but we remain independent of it, stocking product from Saint Gobain, Guardian and AGC.

We stock laminate sheets in 4.4mm to 12.8mm thicknesses, and we reported a 30% jump in demand for cut-to-size laminate prior to lockdown, driven by new regulatory requirements under PAS24, as well as the increased specification of larger IGUs.

Our mirror range includes more than 25 different products, ranging from: standard 3mm to 6mm silvered; safety-backed products; greys, bronzes, pinks, golds, champagne and black tints; and Italian Antique and LED options.

Our supply partnerships have remained robust and we have been able to retain access to a number of product lines that we know (from those new customers who have come to us) are in short supply.

Pilkington is obviously a key partner but as an independent merchant we can also supply a range of products from other leading manufacturers, bringing increased flexibility to our offer.

The prospect of a no deal Brexit could introduce new headwinds to the flat-glass supply chain from the end of this year and into the start of 2021.

We don’t know if we’re going to get a deal or what type of deal it’s going to be; a no-deal scenario is likely to introduce further interruptions to supply.

With demand for glass high throughout Europe, any additional complexities at the border may mean float glass manufacturers focus their efforts on the continent.

We’re also aware of at least one float glass manufacturer that expects to need to restrict supply as it takes its furnaces offline for scheduled cold repairs. This generally lasts for anywhere up to six weeks. This, combined with transitional batching, could lead to up to 12 weeks of disruption and further significant loss of capacity.

This collectively points to continuing pressure on supply making some form of allocation likely to continue into the new year, with further price increases also likely.