The Difficulty of Fixing Glass Prices in a Time of Cost Fluctuation
Glass prices in the UK have fluctuated significantly since 2020, influenced by the global pandemic and a European conflict. Can you fix your glass prices?
In November 2019, the benchmark price index value for sodium carbonate (also known as soda ash) was 1718.
Today, that figure has increased to 2780.
Between those points in time has been an unprecedented peak of 3831 in November 2021 and a relatively low trough of 2219 in January 2022.
In short, the price is going up and down like a yo-yo on a rollercoaster.
But why is the price index of sodium carbonate important?
Because it’s one of the core ingredients needed to create glass. The price of sourcing it is one of the dominant factors that determine how much you pay to complete a glazing project. And like most commodities, the price of sodium carbonate is influenced by real-world events, such as a global pandemic and ongoing war on European soil, both of which were sudden (and ongoing) events, hard to predict, and have had extensive knock-on effects that have influenced almost every industry.
When events are hard to predict and, as a result, fluctuations can happen at the drop – or what feels more like a throw – of a hat, it makes the job of a quantity surveyor very difficult. Perhaps you, yourself, are trying to source glazing for a client that offers the highest level of value without sacrificing design integrity or safety, or maybe you are searching for cost trends that could have an impact on the price they’ll pay.
It can be hard to paint an accurate picture.
Cantifix recognises the challenges that face our industry. We know that material prices are higher than they have been for a long time. So too is the natural gas required to heat furnaces and fuel costs to transport the products. In this piece, we want to talk through these trends in a little more detail and provide our own thoughts on what might happen next, and whether you should search out a cheaper supplier.
We’ve already highlighted the substantial increase in the price of sodium carbonate. But it’s far from the only determining factor when it comes to creating architectural glass.
Other factors include:
Supply and demand
When the UK, like much of the world, went into lockdown during Covid-19, construction projects were paused and put on hold. Float glass factories, such as those in China – a country that produces 60% of the world’s float glass -were shut down. When pandemic restrictions were lifted, demand skyrocketed, while the supply took a long time to catch up. After all, restarting a supply chain takes time. We’re still not out of the supply-demand woods yet.
That sudden increase in demand has caused manufacturers to prioritise the production of standard annealed glass products for home-building projects, significantly increasing the processing times for more specialist items – such as coated glass. Much like the fluctuation in price, things will settle down and supply will return to pre-pandemic levels. But speculating on when that might be is almost impossible.
Natural gas prices
Getting the temperature of float glass ovens up to the required 1500 degrees celsius takes a lot of natural gas. It’s for this reason that so much environmental scrutiny is placed on manufacturers. After all, creating a kilogram of glass can produce between 0.8 and 1.2 kg of carbon emissions.
And where does the lion’s share of natural gas come from?
Before 2022, the country was the world’s largest exporter of natural gas, transporting almost 200 billion cubic metres each year to other countries. Then, in February 2022, Vladimir Putin launched a wholesale invasion of Ukraine. The price per therm of natural gas flew up from $4 in January of 2022 to almost $10 in August.
Why did the price more than double? Because traders shunned Russia as a seller. The result was a high level of demand and a very low level of supply. Today the price per therm of natural gas has settled back down to levels that were seen before the invasion, but the increased costs of production throughout 2022 are still being passed along the supply chain in 2023.
Much like the price of natural gas, fuel costs also rose significantly following Russia’s invasion of Ukraine. According to the United States Energy Information Administration, the price of brent crude oil increased from an average of $72 per barrel in January 2022 to $135 per barrel in March 2022. That’s an 87% increase.
Glass manufacturers who ship internationally and even nationally had a choice: they could either absorb the costs or pass them onto the next stage of the supply chain. Doing the latter increased the price tag of glass.
Are glass prices more settled now?
Yes and no – which is a very non-committal way of saying: “we don’t know, and nor do many of our fellow experts.”
It is true that the prices of fuel and natural gas are currently on a downward slope, lowering the cost of production and transportation from heady heights to something approaching normality – albeit a more expensive normality. But it’s equally true that the price paid for both silicon dioxide and sodium carbonate – two of glass’s principal ingredients – remains high. The costs incurred by manufacturers in 2022 are now being passed to consumers in 2023.
While all of these things are currently true, the lesson to learn from the pandemic’s arrival and Putin’s decision to invade Ukraine is that these global, unprecedented events can arrive out of the blue, pushing prices up overnight. For now, the future of glazing will be more expensive than it was five years ago, but those costs will reduce over time, pending the absence of any global crises.
The importance of sourcing high-quality glass from reputable manufacturers
We’ve established that purchasing glass for your project can be more expensive today than it was five years ago or even just one year ago.
The result might be that you get financial tunnel vision, a concept whereby you can only focus on the price offered by different suppliers rather than a combination of price, quality, and suitability for your purposes.
At best, that tunnel vision can reduce the impact of your design. At worst, it can be dangerous.
Our advice? Only work with manufacturers and suppliers that you trust and who have worked on similar projects in the past. While you may find yourself paying a premium, it’s not because you’re paying too much. Instead, included in that premium is a guarantee that your product complements your project rather than detracts from it.
And on that note…
The Cantifix promise
We’re the UK’s leading architectural glass specialists, providing clients with safe, stylish solutions to their design requirements. We’ve seen price rises before. We may see those rises again.
But throughout periods of increased costs and relative stability, we’ve made the same promise: to provide pricing as bespoke as our products.
If you want to shake on that promise, we invite you to pause for a moment and look at our catalogue of case studies, demonstrating our commitment to good prices and good quality glazing.
Once you’ve done that, contact us today.