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issue: January 2009 APPLIANCE Magazine

Materials Forecast
Materials Forecast: Glass & Insulation


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David Simpson

A Clouded Crystal Ball

¬†From the perspective of Fred Fowler, president of Marsco Manufacturing LLC (Chicago, IL, U.S.; www.marsco-mfg.com), “The market has entered a period of volatility and change unlike anything we have seen in the past 10 to 15 years. Prices for float glass have risen by over 20% in the last six months. Several of the majors are facing serious financial strains, and we can expect continued volatility in the glass market for at least the first half of 2009. There could well be more plant closings or further consolidation in glass manufacturing.”

Where does he see 2009 pricing and availability going? “All over the place! The volatility in almost everything we buy is forcing us to be ultra-conservative in pricing and investment. Our glass suppliers are shying away from setting prices for more than a quarter at a time, and we are going to have to do the same. We saw some chemicals rise on a monthly basis in 2008 but expect to see a little more stability and possibly some declines in 2009. But we do not anticipate ever seeing 2006/2007 price levels again.”

“As a materials supplier to OEM manufacturers, any impact felt by the appliance industry reaches Schott,” says Carlos Mendia, director sales & marketing at the Schott Home Tech (Louisville, KY, U.S.; www.us.schott.com) glass-ceramic cooktops business. “As we approach 2009, we’re seeing a tremendously dynamic market environment. The worldwide economic crisis is having far-reaching effects, which are affecting consumer purchasing habits. On an industry level, we’re forecasting no more than a 5% reduction in volume. On the positive side, raw material and energy costs have recently dropped. Schott is forecasting stable pricing of Ceran in 2009 with no availability constraints.”

“In 2008, glass making capacity was significantly downsized due to plant closures and a shifting of product mix,” reports Mark Delp, executive vice president of Schott Gemtron (Sweetwater, TN, U.S.; www.schottgemtron.com). “The growing solar energy market has created a fast growing market for low-iron glass. Glassmakers are shifting production to this product, taking away capacity for clear float glass traditionally used for the appliance industry.

“The flat glass manufacturers are not planning for any additional capacity in 2009; therefore glass supply for 2009 will mostly likely continue to be tight. The industry is still allocating capacity. However, due to the weak market conditions, glass has been available. The net effect has been that clear float glass is now in short supply and prices continue to increase. This is expected to continue in 2009, despite negative forecasts in housing, commercial construction, and automotive markets.”

“Raw material supply for our fiberglass and polypropylene insulation business has not been an issue in 2008,” reports Mike Cagle, appliance market leader—insulation systems at Johns Manville (Denver, CO, U.S.; www.jm.com). “However, we have seen significant increases in the cost of raw materials, energy, and transportation during the year. Demand in our appliance business in 2008 was strong up until November, when we started to see a downturn in this business segment. We are anticipating some declines in raw material costs early in 2009, but they are not expected to fully offset the previous increases we encountered in 2008.”

 

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