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issue: January 2004 APPLIANCE Magazine

2004 Materials Forecasts
Glass - Gas Impacts On Glass


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by David Simpson, Contributing Editor

Glass - heavily dependent on natural gas for processing - has been significantly affected in the U.S. by continuing high energy costs.

2004 Materials Forecasts
"The flat glass makers have been assessing energy surcharges for well over 1 year. These surcharges are tied to the natural gas prices and have been as high as $600 per truckload. We don't see this changing significantly in 2004," says Mark Delp, executive vice president for Gemtron Corporation (Sweetwater, TN, U.S.).

The economic conditions that drive flat glass demand are improving," he adds. "Housing starts have remained strong; forecasted at or above 1.75 million units in 2003. Continued low interest rates have been giving the housing market a strong foundation for growth. Lower interest rates have also driven growth in the remodeling sector through second mortgages. This money is often invested in remodeling kitchens, which is positive for the appliance industry. Non-residential construction improved slightly in the second half of 2003, and the industry is hopeful for a better recovery in 2004," Mr. Delp says.

 


In glass production, a rotary cross cutter slits a glass ribbon crosswise prior to packing. Photo courtesy of Pilkington (Toledo, OH, U.S.).

"Glass availability has been very good," reveals Rick McCurdy, business segment leader for Specialty Glass Products at Pilkington (Toledo, OH, U.S.). "The big story has been the cost of natural gas, which has necessitated energy surcharges in the industry. I expect these surcharges, which are set quarterly, will remain for a while - until gas gets down to more historical levels. Demand overall looks to be up slightly, with more glass going to the commercial sector. But there is a little excess capacity, and pressure from imports. In commodity glass, a lot more is coming from China."

 


"We expect glass prices to increase in 2004. The reasons are the improving economic conditions and the rising natural gas costs."
Mark Delp of Gemtron Corporation


 

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