Glass production: a global look at demand for 2018

By Michael Greenfield
Published: Monday, 08 January 2018

The glass market is the primary driver for soda ash production. More than half of the global output of dense-grade soda ash is used as a fluxing agent in glass production.

India

There is some concern for the Indian glass-manufacturing sector because companies continue to battle with a stream of dumping issues. A soda ash anti-dumping ruling, which is being challenged, has pushed manufacturers’ costs upward by 5-15%.

The ruling on September 2017 by the High Court of Gujarat extended the duties on soda ash imports from seven markets. The United States and China - which are the world’s two largest producers - received the highest duties at $38.79 per tonne and $38.26 per tonne, respectively.

The Indian industry’s concerns have been compounded by glass and glassware being dumped into the Asian sub-continent from China and Malaysia. This material is "cheaper and probably better quality," according to Vinit Kapur of the All India Glass Manufacturers Federation (AIGMF).

There are currently tariffs on tempered glass and fiberglass from China but India’s manufacturers, which are largely concentrated in the glass-production hub of Agra, are looking for more protection against cheap foreign imports - presumably in the form of tariffs.

Thousands of jobs depend on the glass industry in Agra yet, despite the trade headwinds facing the sector, no manufacturers are looking to lay off workers or cut back their operations.

Globally, the construction industry is the primary driver for glass consumption, for its use in windows. But the Indian market is unique because more than half of the demand is for container glass as opposed to flat glass. And domestic demand for such products is growing by 6-7% per year.

"As the middle classes are becoming more aware of the need for [healthier, more environmentally friendly] materials, consumers now believe that glass is the best packaging [material] and people are switching over," Kapur said.

India has been grappling with various pollution problems, with Delhi experiencing smog so heavy that it has caused flights to be suspended.

But in mid-December, the glass containers segment got another boost when the National Green Tribunal, a statutory body set up in 2010 to deal with environmental cases, moved to ban the use of plastic containers in towns and cities along the River Ganges.

"We are also optimistic [about the market for glass] because of the requirement [for use] in construction and automobiles," Kapur added.

Europe

Container glass continues to be the strongest growth area for producers in the European Union, with the market growing by 6% over the past five years, and by 3% in 2016 alone.

A major driver for growth was exports, with Switzerland accounting for 15%, the US for 13% and Serbia for 7%.

"[There is] a big increase in [glass used for storing and transporting] food products - that is the growing market," Adeline Farrelly, secretary general of the European Container Glass Federation (FEVE), told Industrial Minerals.

A good example of this is that more than 85% of consumers in the region now get their drinks in glass bottles.

As is the case in India, the glass industry in the EU is looking at ways to reduce carbon dioxide emissions by 2.2% every year. This will primarily be achieved through developing the circular economy of recycling and reuse, Farrelly said.

"We are very keen to know what our suppliers are doing to help us," she added.

The glass industry has actively promoted recycling for 40 years, developing ways in which resources can be reused as opposed to being mined, used and thrown away after one lifecycle.

For soda ash producers, however, this could lead them to explore other lines of business such as pigments, dyes and colorings.

China

In China, French multinational entity Saint-Gobain is primarily involved in the production of automotive glass.

China’s car production in the first ten months of 2017 totaled 22.98 million vehicles, according to data from the China Association of Automobile Manufacturers.

Automotive glass production is expected to increase by 2-3% in 2018. This will be driven largely by the continued rise in spending power of the country’s middle class, although softened by the ending of some tax incentives on vehicle purchases.

From January 1 this year, for example, small-engine vehicles have been taxed at the standard rate of 10% - up from 7.5% in 2017, and by 5% from 2016 - because tax incentives have been gradually phased out.

The growth of the Chinese automotive industry slowed sharply over the course of 2016, although this was offset somewhat by stronger demand for hybrid-power and electric cars, which jumped by 51.4%.

Windshields for original equipment manufacturers (OEMs) and the replacement sector provided the demand for exports, although this was "a small portion" of total production.

The domestic Chinese construction sector was another key driver for glass demand in the country, but sentiment was mixed because many developments remained unsold or empty.

Despite this, data from the National Bureau of Statistics showed continued growth in real estate investment over 2017, providing more reassurance for the soda ash supply chain.



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