August 22, 2006
Vol 1 | Num 11


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Find supplies ahead of time

A mid-July survey of U.S. float-glass manufacturers about the health of their glass supplies produced a range of opinions on inventory levels, and consensus on a singular fact: Don’t expect to pick up the phone and order with the same lead time you had in the past, suppliers advise.

In written reports from AFG Industries Inc. of Kingsport, Tenn., and Cardinal Glass Industries of Eden Prairie, Minn., officials said that U.S. glass supplies were currently tight and that they expect the situation to continue through year-end 2007, with all regions except the Northwestern United States affected. In an off-the-record interview, an official from a third manufacturer said his salesforce was “allocating” glass.

The cheapest and least profitable kind—clear glass—might be in short supply as “producers will protect shares of value-added products,” predicted Frederick E. Wallin, AFG vice president of marketing, in the survey.

The mounting plethora of value-added products, such as coated and decorative glass, cut into the availability of clear glass.

“As more value-added products come on to the market, internal losses cut into inventories,” added Russ Ebeid, president of Guardian Industries Corp.’s Glass Group, in an Aug. 15 interview.

U.S. float-glass capacity remains relatively stable. Although Mexico’s Vitro shut its Mexico City tank early in 2006 and U.S. manufacturers plan at least two float-tank rebuilds for 2007, survey respondents said, and Cardinal Glass Industries has a new float-glass tank in Washington state that may increase that company’s capacity as much as 25 percent.

Officials from many companies advised planning and ordering earlier as a hedge.

In interviews, officials from other glass companies scoffed at the notion of tight supplies. “I am not in an alarmed state at this time,” said Russ Huffer, Minneapolis-based Apogee Enterprises Inc.’s chairman, who has fabrication and contract-glazing subsidiaries. He cites falling housing starts and flat auto production as offsetting high demand from nonresidential construction.

Leon Silverstein, chief executive officer of Arch Aluminum & Glass Co. in Tamarac, Fla., also insisted that supplies remain at normal cyclical levels usually seen at this time of year.

Wallin, on the other hand, argues that “improvement in multifamily housing has somewhat offset decline in single-family starts,” and notes that commercial construction has hiked glass demand by 6-to-8 percent over 2005.

 

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