As the international glass market continues to recover from
the global recession, experts predict emerging markets might be
tempted to invest in plant development to manufacture their own
flat glass rather than paying expensive import fees buying from
one of the handful of major suppliers.
Nick Limb, managing principal at Ducker Worldwide, a
US-based international industrial market research and
consulting company, said: "The big picture is that
we’re going to see new activity in float [flat
glass] in places which are difficult [to operate in]
economically, such as Africa and parts of Asia. Companies are
exploring float capacity there. Like the oil industry where you
find future supplies in hard to reach areas, float faces the
same challenge."
He said many emerging market governments want to establish
national float plants, but find the economic justification
tough to demonstrate, especially given such factories need a
significant amount of capacity to be viable: "They have to
create the level of demand (…) so while countries aspire
to it, they can’t justify the investment."
Rather, globally, there has been excess capacity, he
stressed, with North America or Europe mothballing plants
during the recession, which have yet to be reopened.
In the US, imports now account for 10% of American glass
sales, he said, as it was cheaper to import rather than
restart
local plants.
China is now "the big player" in flat glass production, he
said. It has the greatest number of glass-producing enterprises
and the largest number of float-glass production lines in the
world.
A statistical report Flat Glass Market from
US-based Global Market Insights (GMI) released in March 2017
predicts the China annual flat glass production volume will
exceed $55bn by 2023 out of a projected worldwide total
production of $134bn.
It says continued buoyancy in the global construction and
automotive sectors, the biggest users of flat glass, will drive
the market up during that forecast period.
Demand is especially likely to grow in emerging markets, for
instance in China, where the Civil Aviation Administration of
China (CAAC), in the country’s twelfth Five Year
Plan (2011-2015) forecash investments of around $65bn for
building new and restructuring existing airports –
spending that is still working its way through project
budgets.
Demand for flat glass in the Middle East and Africa (MEA),
led by Saudi Arabia and Qatar, is expected to grow over 7% by
2023 thanks to increasing construction spending in the region.
Also, the Indian flat glass market is expected to witness
"handsome growth" fuelled by the expansion of manufacturing
industries coupled with increasing foreign investment, said the
GMI report.
Limb also predicted more low iron glass production for solar
power applications as the clearer glass produced by the finer
sand allows in more sunlight than its mass-produced
equivalent.
The GMI report said there was international production of
72.9m tonnes of flat glass during 2015, compared to 61.2m
tonnes during 2012. That equated to 9.1bn square metres in 2015
(up from 7.65bn in 2012) with a market value of $76.8bn up from
$63.2bn in 2012. Tempered glass accounted for 29.8% of these
totals, with China being dominant here too.
But mature markets for tempered glass may also expand:
"Growing tempered glass importance for automobile applications
in the US, Germany and UK owing to being lightweight compared
to its counterparts, should drive flat glass market size," the
report said. International automotive production in 2015 was
approximately 90 million units, with China being the dominant
national producer, making more than 20 million units that
year.
"Passenger safety is a growing concern for automotive
manufacturers and the industry stands to benefit immensely from
it" said the report. It estimates the global tempered glass
market passing $40bn in 2023.
A report from strategic analysts Lucintel published this
January, 'Growths Opportunities in the Global Flat Glass
Industry 2016-2021: Trends, Forecast, and Market
Analysis’, reported similar findings. It
said: "Low interest rates and favourable taxation schemes are
expected to drive vehicle sales, which would spur growth for
this segment."
|
As construction and automobile
production picks up so too does the
demand for glass. Last year European demand for
automobile glass
was up 7% on the previous year, according to Glass
Alliance Europe. |
Glass minerals
In terms of demand for glass manufacturing minerals, this
report states: "The supply-demand deficit with price
fluctuation of soda ash may affect flat glass market
trend."
In 2016 the total value of domestic natural soda ash
produced in the US was estimated to be about $1.8bn, according
to the US Geological Survey (USGS). Production of 11.7m tonnes
was about equal to that of the previous two years but about
600,000 tonnes higher than production in 2012. The US soda ash
industry comprises four companies in Wyoming operating five
plants and one company in California with one plant. The
USGS’ latest figures show that 50% of this total
was used in glass production, although soda ash consumption is
declining as glass container producers are increasingly using
recycled cullet in the manufacturing process.
That said, relatively low production costs and lower
environmental impacts provide natural soda ash producers some
advantage over producers of synthetic soda ash. The production
of synthetic soda ash normally consumes more energy and
releases more carbon dioxide than that of natural soda ash.
The USGS report, released in January, said world production
is dominated by the American National Soda Ash Corp (ANSAC),
which markets the products of three of the five US producers;
Solvay SA, of Belgium; and multiple producers in
China.
"Asia and South America remain the most likely areas for
increased soda ash consumption in the near future," said the
USGS, which predicted US producers would see continuing "modest
growth in production and exports through 2020".
Consumption of sand and gravel in the US last year was 89.4m
tonnes, a 10% reduction on 2015. Approximately 7% of industrial
sand and gravel production is used for glass-making sand.
Minerals and recycling
Adeline Farrelly, secretary general of the European
Container Glass Federation (FEVE) stressed the recyclability of
glass, with recycled glass or cullet the European
industry’s most important raw material, reducing
demand for raw materials such as sand, soda ash and
limestone.
"In the EU28, some 74% of glass bottles and jars are
collected for recycling," she said. "Some 90% of them are
actually put back into the production of new container glass.
For each tonne of recycled glass, 1.2 tons of sand are
saved."
As for European mineral input data, it is not as abundant as
glass output figures, with GAE co-ordinator Véronique
Favry telling IM that companies are reluctant
to release data on use of minerals such as silica sand and
borates: "Glass formulas are very diverse and strictly
confidential between glass companies," she said. "The biggest
use is however crystalline silica and soda ash."
FEVE’s environment, health and safety director
Fabrice Rivet said that for container glass, "generally, the
raw materials are locally sourced, to about 300 kilometres. The
exception is natural soda ash coming from the US or
Turkey."
The main material in tonnes of raw materials per year in the
EU plus Switzerland and Turkey is silica sand at 7.3m tonnes,
followed by soda ash (2.05m tonnes), limestone (1.57m tonnes),
dolomite (0.732m tonnes) and other materials (0.715m
tonnes).
The European industrial minerals association
IMA-Europe’s estimated EU’s annual
consumption of silica at around 66m tonnes in 2013 –
with glass the leading application for high-grade silica
sand.
"Based on our current market analysis and estimated
recycling rates, we can consider that about 73% of all silica
used is recycled," said an IMA-Europe note, cautioning, "this
figure is an EU-wide average and regional disparities
exist."
|
Letting off steam: Tronox
Alkali’s Green River facility in Wyoming,
US.
Tronox Alkili |
Markets
As for sustainability issues, a 2015 International Labour
Organisation (ILO) working paper predicted improvements in
production energy efficiency in coming years, through thermal
isolation of furnaces, heat recuperation from combustible gas
and improvements to the combustion chambers. "Increasing use of
recycled glass will also reduce the need for high temperature
fusion," said author Nora Wintour.
According to Wintour, the global market for container glass
packaging is of critical importance, being valued at $47.43bn
in 2012 and projected by ILO to reach $59.94bn by 2019, growing
at 3.4% per year from 2013 to 2019. In terms of volume, global
demand was 45.71m tonnes in 2012 and is expected to grow at
3.1% per year from 2013 to 2019, said ILO.
A strategy briefing from London-based market researchers
Euromonitor International predicted that the glass industry
would in coming years find "valuable opportunities" in the
beauty market – especially as the cosmetics industry
has pledged to reduce oceanic plastic waste.
EU Production
In Europe, the glass sector has been thriving, European
industry associations have told IM, with
the European Union (EU) being the largest glass producer in the
world, covering about 33% of the total world market. According
to the Statistical Report 2015-2016 of
industry organisation Glass Alliance Europe (GAE), that
represents the container glass, flat glass, special glass,
domestic glass and continuous filament glass sectors.
In 2015, EU glass production exceeded 35m tonnes. This was
up 3.8% on 2014 (34.5m tonnes) and reflecting a steady recovery
from the recession – production was 32.2m tonnes in
2009: glass sectors have been stabilising "since 2013 thanks to
slightly better market conditions and consumer confidence,
particularly noticeable during the second semester 2014 and
2015," the report states.
For 2016, the alliance said there has been "a continued
improvement of market conditions" - for the first time in many
years, all glass sectors increased production, due to a revived
construction sector, car industry, engineering and food
services sectors. For example, the flat glass segment benefited
from a 7% volume increase in automotive glass, boosted partly
by a design trend to increase glazed areas in vehicles, notably
panoramic sunroofs.
Container glass made up most EU glass production tonnage in
2015, followed by flat glass (29%), domestic and other glass
(3%) and reinforcement fibres (2%). Germany remains the
EU’s biggest glass producer with about one fifth
of the volume, closely followed by France, Spain, Italy and the
UK.
Stéphane Noël, Environment adviser for flat
glass manufacturers’ trade association Glass for
Europe (building, automotive and solar-energy glass), said that
for his segment "the return of the market seems to be confirmed
for the second year in a row, with a growth rate of about 2%
[in 2016]."
The latest results of major industry player Saint-Gobain of
France, one of Glass for Europe’s five members,
along with AGC Glass Europe, Guardian, the NSG Group and
Sisecam-Trakya Cam, bear this out. Saint-Gobain 2016 results
released on February 23 showed a 2.6% sales increase and 10.8%
rise in operating income, including a 6.5% sales increase for
flat glass. "Saint-Gobain showed strong progress in its 2016
results," noted its chair and CEO Pierre-André de
Chalendar. He said a similar increase would be targeted for
2017, adding: "The group also benefited from its focus on
pricing against a backdrop of lower energy and raw material
costs."
That said, 2015 showed a "stagnating trend" for special
glass production. And, reinforcement glass fibre production
only surpassed the 2011 levels in 2015, reaching 793,000
tonnes, according to the GAE annual report.
|
Turkey’s Sisecam
became the largest producer of flat glass in Europe in
terms
of capacity, after acquiring Italy-based flat-glass
manufacturer Sangalli for €84.7m
Sisecam |
EU export and import
Turning to trade, the EU’s major glass product
export markets are the rest of Europe (50%) including
Switzerland (15%), Turkey (8%) and Russia (4.5%), followed by
the United States (12.2%) and far east Asia (9.3%) including
China (3%). In 2015, EU exports decreased by 5.9% year-on-year
in volume and stabilised at minus 0.4% in value compared with
2014. Exports were of greatest importance to the special glass
and tableware sectors, the report said.
As for imports, Asia suppliers were important, specifically
China, particularly for the domestic, special glass and
reinforcement glass sectors. EU imports increased by 4.35% in
volume and by nearly 14% in value compared with 2014. Asia was
the biggest import source at 48% of sales – including
39% from China alone, followed by the rest of Europe (38%)
– including Turkey (9.7%) and Switzerland (10%)
– and the
US (4.5%).
Headwinds for the glass industry
Not all EU glass manufacturers are thrilled with this rise
in imports of course. EU glass fibre producers’
association GlassFibreEurope said unfair competition, notably
from China, closed European factories and killed jobs. Ahlstrom
closed its glass fibre business in 2012, European Owens Corning
closed one facility each in Italy and Spain in 2013 and P-D
FibreGlass stopped European production at the end of 2015.
The group welcomed EU member states’ decision
in December 2014 to approve antidumping duties against Chinese
glass fibre manufacturers, imposing total tariffs of up to
25-30%. Ministers backed European Commission claims that
Chinese manufacturers had dumped continuous filament glass
fibre (CFGF) at predatory prices to seize EU market share,
receiving subsidies from the Chinese government in breach of
global trade agreements.
The alliance argues that the glass sector is under pressure,
highlighting concerns that the revised EU emissions trading
scheme (ETS) might ultimately drop glass from its carbon
leakage list that gives sectors special carbon trading benefits
who risk losing business to competitors with weaker
carbon-control legislation. If EU glass or glass fibre
production was excluded from this list, its global
competitiveness would be severely damaged, it said. The GAE
said that it was critical for the glass tableware industry to
remain on the list beyond 2020 and to receive CO2 quotas for
free.
The glass industry is further concerned about how respirable
crystalline silica (RCS) will be regulated at EU level. Last
October (2016), the EU Council of Ministers backed amendments
to a directive protecting workers from exposure to carcinogens
or mutagens in the workplace (2004/37/EEC). If also supported
by the European Parliament, it would set exposure limits to RCS
dust as well as refractory ceramic fibres.
EU domestic glassware manufacturers’
association European Domestic Glass (EDG) is concerned, saying
the reforms should not limit exposure in domestic glass
production where no realistic substitutes are available.
The European Special Glass Association, also affected,
"urges the EU authorities to clarify the definition of this
substance and the criteria which industry and inspectors should
consider…".
Other regulatory concerns for the EU glass sector are a
planned revision of a directive 84/500/EEC on ceramic articles
intended to come into contact with food. The changes foresee
dramatically lower migration levels for lead and cadmium. This
is a major issue for lead crystal and enamel decorated
glassware in contact with food, the GAE report makes clear.
Despite these regulatory issues, European glass industry
employee numbers are stabilising, with the EU industry
currently employing 185,000 people including processors, an
increase of 1.9% compared with 2014, said the GAE
report.
"We can say that the industry is doing generally well," said
FEVE’s Farrelly. "Against a European and
international macroeconomic context of uncertainty and modest
growth, the container glass food and drink production in Europe
[EU’s 28 member states plus Turkey and
Switzerland) recorded positive strikes in 2015 with more than
21m tonnes of food and beverage containers produced," she said,
adding: "Container glass (….) production has been
steadily increasing which allows for a prudent but realistic
positive outlook on the future."
ANSAC Member companies
Tronox Alkali Wyoming Corporation
Tronox Alkali is the world’s largest producer
of natural soda ash. The Alkali division mines and processes
trona ore and manufactures soda ash. It also produces sodium
bicarbonate and other chemical compounds used in common
industrial and household applications.
Tata Chemicals (Soda Ash) Partners
Tata Chemical’s Green River operation is one of
the largest soda ash facilities in North America. The
Partnership is 75% owned by Tata Chemicals North America Inc,
based in Rockaway, NJ and 25% owned by the world’s
largest glass container producer, Owens-Illinois Inc,
headquartered in Perrysburg, OH.
Ciner Resources Corporation
Headquartered in Atlanta, Georgia (USA), Ciner Resources
Corporation is the North American subsidiary of The Ciner Group
of Istanbul, Turkey.