Sheet Glass Market. February 2025

In February 2025, 7 out of 11 sheet glass producers reduced their output compared to the same period last year. The industry-wide decline in production was almost 23%. According to market participants, shipments by rail decreased by a quarter, and by almost a third over 2 months. Overall, sheet glass consumption decreased by more than 20%. Producer prices froze.

Possible factors for the decline in demand for sheet glass in Russia and their impact on production in February 2025:

1) Slowdown in economic growth

A slowdown in economic growth is a key factor influencing the decline in demand, including for sheet glass. In February, GDP growth rates dropped to 0.8% year-on-year against 3% in January.

This is due to the tightening of monetary policy and an increase in interest rates, which limits the availability of loans for businesses and slows down investment processes in construction and industry. Experts point to clear signs of impending stagnation, which are manifested primarily in industry.

2) Declining demand in the construction sector

The construction sector is the main consumer of flat glass, and any changes in this sector directly affect the need for the material. A decrease in construction activity, especially in the residential and commercial segments, can lead to a sharp decline in demand. A decrease in the volume of new construction projects and repair work can also restrain glass consumption.

3) Export restrictions and logistics problems

In recent years, Russian glass exports have faced serious difficulties due to international sanctions and logistics problems. A decrease in export volumes to Europe and other regions where there has traditionally been high demand for Russian products limits production volumes at enterprises.

4) Pricing policy

In the context of a general decline in demand for building materials, including flat glass, manufacturers can reduce prices for their products to stimulate demand. This is possible in the short term, because in the future, in the context of constant growth of tariffs of natural monopolies, this may lead to a decrease in profits and even negative profitability, which in turn affects the possibilities for further expansion of production. As a result, this becomes another factor restraining the pace of production.

5) Influence of seasonality

February is traditionally a month with limited activity in the construction sector, which can also affect the demand for sheet glass. In winter, the amount of construction and installation work usually decreases, which affects the need for materials. But not this time - in February 2025, abnormal heat was observed in Russia.

Conclusion:

These factors together could lead to a reduction in the production of sheet glass. To restore positive dynamics, comprehensive support from the state and industry is required, aimed at stimulating demand and improving export opportunities.

Source: cmpro.ru