Lack for flat glass in the world
2008-08-15

                                                                                            Worldwide Flat Glass Glass Market

Glass market research Worldwide Flat Glass Market: An Analysis The worldwide flat glass demand comes from three key sectors, construction, automotive and specialty, with the construction sector contributing about two-thirds of the worldwide demand. A key trend is increasing demand for value-added glass products, particularly for automotive glazing and architectural applications. The dominance of China as a major market for glass has been increasing with economic liberalization and rising foreign investment. China accounts for about one-third share in the worldwide demand of flat glass. India has one of the lowest per capita flat glass consumption but with rapid growth in domestic construction and automotive markets, it presents a significant opportunity for global glass majors. The flat glass industry is fairly consolidated, with four players (NSG, Asahi, Saint-Gobain and Guardian) holding about two-thirds of the worldwide flat glass production capacity. World Demand for Flat Glass According to a study from the Fredonia Group, production of flat glass is projected to increase 5.2 percent per year through 2008 to 48.3 million metric tons, of which around 34 million metric tons will be high quality float glass. Construction markets will grow the fastest based on expanding global fixed investment: consequently, demand in the already dominant architectural glass sector will register the best gains. The market for architectural glass is forecast to grow 5.4 percent per year through 2008 to US$53 billion: it will benefit from the greater use of value-added glazing products (such as laminated, tempered, mirrored glass, and, above all, double-glazed insulating glass units, which have become more and more popular in developed countries). Asia will continue to offer strong annual gains, with growth especially strong in China and India. The US market for fabricated flat glass is forecast to outpace the global average, although actual gains in metric tonnage and square meters are expected to remain slightly above the average. Western Europe will continue to post the weakest sales growth, hindered by below average economic growth. Glass demand growing worldwide, but price pressure still on: the architectural 

a) Demand for glasses The flat glass industry continues to be a growth sector with demand for products increasing at a rate faster than economic growth all over the world. While growth during 2004 is expected to be modest, over the long-term demand for glass is still growing worldwide at 3.6% a year. Pilkington, the British-based glassmaker that developed the float process in 1952, says the past 50 years have seen a significant increase in the proportion of glass used in buildings. Architects designers are using larger surface areas of glass in their designs, increasingly with added functionality and complexity. Architectural glass no longer merely glazes; it controls energy use, protects against fire, insulates against noise, provides safety and security, gives decoration and privacy, cleans itself and provides all-glass facades. Basic flat glass can undergo two or more stages of processing before being installed as windows, glazing systems, furniture or white goods. b) Price for architectural glass Selling prices for architectural glass in Europe are still suffering from low prices, and demand in continental Europe is weak. Pilkington says capacity utilization remains low but the absence of new float line builds over the coming two years should restore a balance between supply and demand. Recent new developments in Europe have included Guardian's new float lines in Poland and the United Kingdom. Competition also continues in semi-finished glass products such as off-line coated glass and insulating glass units c) Influence in some countries’ marketers In North America, commercial construction is growing only slowly but glassmakers are finding profits easier to come by mainly through cost cutting. Residential construction is still strong there. Mexico's market has started to recover. Brazil's inflation has fallen over the past few months and its exchange rate has stabilized but low growth rates and a dip in construction activity have hit demand for float glass there. Float glassmakers report rapidly improving exports from Brazil, and demand in Argentina has picked up markedly. Glass demand in Australia and New Zealand has been sustained by strong housing markets, mainly due to the home improvement and refurbishment sector. In New Zealand, high net immigration is fuelling a boom in new construction. Commercial building is also doing well at present in an economy that has grown on the back of increased consumer spending. Domestic demand in China for float glass and for processed architectural products is strong and, according to Pilkington, the market grew by 10% last year. Prices have started to improve. Middle East markets for architectural glass remain strong, particularly in the United Arab Emirates and especially in Dubai where construction is booming. New float lines are planned for several countries, including Egypt and Syria, to join already strong float producers in Iran, Egypt and Turkey. d) Phenomena in marketers Competition is growing from independent producers in many different parts of the world, so price pressure will remain, but for as long as demand in China stays strong profits should be achievable for all players. Once demand starts to fall, then a big shakeout of flat glass producers and processors is very likely.