Glass: production down by up to 15 per cent as costs have doubled
Companies are being hit by rising energy costs and the EU Emissions Trading Scheme (ETS). Weak demand and competition from outside the EU are also a cause for concern.
‘We are experiencing a crisis worse than that of 2022: unlike then, demand is weak. Energy costs have risen: back then, we were coming off the back of years of low prices, and the long-term contracts signed before the war in Ukraine were able to cushion the blow, but that is not the case today. Finally, we are under great pressure due to increasingly fierce international competition from China: whilst also grappling with weak demand, it is dumping its surplus production on us.” This is how Walter Da Riz, Director-General of Assovetro, summarises the challenges facing the national glass industry. A sector with a turnover of 9 billion euros, comprising 16 per cent direct exports, 28,800 employees, 60 plants operated by 32 large-scale manufacturers, more than 300 processing companies, and 6 million tonnes of molten glass produced annually: 17 per cent of EU production, making Italia the continent’s leading manufacturer, as confirmed by the association’s figures.
“Margins are shrinking ever further, and we will end 2026 with production cuts of up to 15 per cent and production costs that have doubled due to rising energy prices and the ETS. We are already at our limit: we cannot go any further, unlike perhaps other materials. Our plants, which must maintain a constant temperature of 1,600 degrees, cannot be switched off and then back on again, nor can we adjust production beyond a certain technical limit,” explains Da Riz. He adds: “Everyone is slowing down production. In Italia, we’re not closing any plants for the time being, but I can’t say what will happen next year. If things carry on like this, it will become increasingly difficult. In Europe, 15 plants linked to hollow glass have been closed in recent years, 7 in the flat glass sector, and two in the glass fibre sector (out of a total of 11). This production capacity cannot be restored: it is unlikely that anyone will rebuild it given these energy, environmental and social costs.’
China, meanwhile, in addition to domestic production – on which tariffs may be imposed – is focusing on a market closer to Europe, which offers tax incentives, environmental legislation that is not comparable to that of the EU, and plenty of sand for glass production: Egypt. ‘Among the various Chinese initiatives here is a new factory with an annual capacity of 400,000 tonnes of glass fibre. European demand stands at 1 million tonnes per year. Imports to our continent have increased fivefold. Next in line will be tableware and products with lower added value,” says the director-general of Assovetro.
What solutions? “We could turn the Italian PSV into the European gas exchange, given that Italia is a natural hub, instead of the TTF. And then we should be able to secure gas in the medium to long term at cost price, perhaps through an industrial policy initiative led by energy companies operating in our country,” replies Da Riz.
