Government Instability Is Causing Glass Chaos

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Whilst chaos reigns supreme within the party in power in national government and other forces causing economic turmoil, don’t expect stable glass prices says Mark Mitchell of the Cornwall Group.

Mitchell, who is chair of the group of glass supply companies, was writing following the government’s recently announced energy support package for businesses. He claims energy surcharges imposed by glass manufacturers will likely remain in place for some time yet with global pressures on gas supply causing peaks and troughs…with mostly peaks through the winter.

In September, the government announced an emergency support package for businesses to help with the cost of energy. It pledged to cap the wholesale price of energy at £211 a megaWatt hour for electricity and £75 a megaWatt hour for gas, which is less than half the wholesale prices anticipated this winter.

The changes will apply to new contracts from 1 October, and to fixed contracts taken out since 1 April.

 “There is no doubt that this energy cap for businesses is good news. We are an energy intensive business and we have seen our energy bills rocket in recent months.”

– Mark Mitchell 

Chair, Cornwall Group

Pass it on

“For example, our combined energy bill was approaching £250,000 per month, where previously it was £60,000 per month. These costs have to be passed down the supply chain in the form of price increases because they simply cannot be absorbed by us or our suppliers,” continues Cornwall Group’s Mitchell. “And it is important that our customers keep an eye on input costs from all suppliers because they don’t want to be left holding the can.”

The cap doesn’t fit

The energy surcharges imposed by the glass manufacturers are not currently affected by this price cap and there is no sign of them being lifted. “The government price cap for businesses was supposed to calm an uncertain situation, but the only certainty we now have is uncertainty,” sayhs Mitchell. “While we can manage our own energy prices a little more confidently, we are still at the mercy of the glass manufacturers who impose often unpredictable surcharges with little notice.

“Also, while western Europe is suggesting it is well placed for gas supplies this winter, that remains to be seen. A harsh winter will naturally put a huge strain on supplies. Additionally, Far East demand remains high for gas, causing ongoing spikes in global pricing.

“So, while the support with energy cost is welcomed, it will be a few months yet before we see what the full impact will be. Meanwhile, we’ll be waiting to see what happens with the energy surcharge because greater clarity on that will benefit us all.”

Picture: Energy confusions still reigns, despite government support, claims Mark Mitchell of the Cornwall Group.

www.cornwallglass.co.uk

Article written by Cathryn Ellis
20th October 2022

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