Topic of the month January

STUDY SEES WORLD GLASS DEMAND RISING

World demand for flat glass will rise more than 4 percent per year to nearly 4 billion square meters in 2004, with a market value of over $40 billion, according to a new study from The Freedonia Group Inc, a Cleveland based industrial market research firm.

Demand for raw flat glass was forecast to reach 39.2 million metric tons in 2004, according to the report. Given that forecast and assuming an industry-wide utilisation rate of about 85%, the global industry would require about 14,000 metric tons per day of new float glass capacity from the installed base at year-end 1999 to meet market demands through to the end of 2004, the study projected.

The construction market would offer the strongest gains, with demand forecast to expand 4.7 percent per year to 2.5 billion square meters in 2004, according to the report. In developed regions, demand for architectural glass would reflect in part the implementation of tighter energy standards, while in developing regions, the acute need for adequate housing and the on-going expansion in the commercial and industrial sectors would be the primary forces behind gains, it added.

Asia would continue to offer strong annual gains, due largely to sustained expansion in the large Chinese market. Long term prospects remained favourable, predicated on the region's pressing need for adequate new housing, industrial expansion, and rising motor vehicle production capabilities.

Renewed expansion gains in per capita income levels were bolstering indigenous demand for consumer goods, including glass-intensive items such as appliances, furniture, and mirrors.

Although the massive US market will continue to be the largest, the most rapid growth in the North American region will be in Mexico, the report projects. Western Europe's flat glass market had seen solid gains in recent years due mainly to a stronger construction industry and rejuvenated consumer spending dynamics. Those two trends would promote solid new gains in flat glass demand in construction and specialty markets. Stille one exception is Germany, however the latest forecasts may permit to count on a possible turnaround.

Long-term glass demand growing at 4 to 5 percent per year

 Over the long-term, glass demand is growing at 4 to 5 per cent p.a., significantly above global economic growth rates. Capacity utilisation is expected to remain above 85 per cent over the coming years.
 Demand growth for glass is driven not only by economic growth, but also by legislation and regulations in response to the growing need for energy conservation.

 Demand for value-added products is growing more quickly than for basic glass, enriching the product mix and boosting the sales line of the building products industry.

 Value - added products are also becoming increasingly important in the automotive market, delivering greater functionality to a vehicle's glazing and adding a further growth dimension to automotive glazing sales.

Total annual world market for Flat Glass around 32m tonnes - worth €14 billion at primary level, €42 billion at processed level

The global market for flat glass* in 2000 was approximately 32 million tonnes (~ 4 billion m2**). At current price levels, this represents a value at the level of primary manufacture of around €14 billion. On average, this market is growing in volume terms at about 5 per cent a year.

A proportion of the high quality float glass, and indeed some of the rolled, is further processed by laminating, toughening, coating and silvering and some of this ends up in the form of insulating glass units or automotive windscreens and sidelights. At this level the market has a value of approximately €42 billion.

* Glass manufactured in flat sheets (float, sheet and rolled) which may be further processed. Excludes bottles, containers, fibreglass, rods, and tubes.

** On average 1 tonne is approximately 125 sqm.

The global flat glass market is worth around €14 billion at the primary level and €42 billion at the level of secondary processing.
The global market for float/sheet glass (excluding rolled glass) is approximately 30 million tonnes p.a. This is dominated by Europe, China and North America, which together account for over 70 per cent of demand.

Source: OGIS GmbH, http://www.glassglobal.com (The foregoing information was compiled from publicly available information in annual reports and news releases)