Increasing Supply Chain Costs Drive Price Increases for Industry Suppliers

A number of glass industry companies and suppliers have recently announced price increases on various products. These increases, which are resulting from escalating costs seen throughout the supply chain, are impacting a wide range of companies, including glazing contractors and glass fabricators, among others.

Yesterday, Owatonna, Minn.-based Viracon notified customers of a price increase on quote requests received on or after May 12, 2021. A letter from Garret Henson, vice president of sales and marketing, points to price increases of 8-13% on float glass and coated float glass from primary glass suppliers within the commercial architectural industry, which take effect this week, as cause for the increase.

“We have experienced substantial cost increases in packaging materials, over the road freight costs, laminating and insulating materials. While we work hard to achieve continuous productivity improvements at Viracon, increases of this scale cannot be fully absorbed,” reads the letter, which says their pricing escalation will depend on the float glass, specialty coated glass, and product configuration utilized.

Another Midwest glass fabricator also recently alerted companies of its price increase, after it said it was notified by its float glass suppliers in April of their 10-13% price increase. As a result, this particular fabricator is raising its prices and says it is also experiencing extended lead times and stock outages from all suppliers.

On the materials supply side, Kuraray also announced a global price increase of 0.30/square meters (0.76mm / 30mil equivalent)-plus on its Trosifol PVB interlayer and SentryGlas ionoplast interlayer. According to the announcement, the price increase is due to cost increases in raw materials, packaging materials, transportation and logistics.

Joe Gudenburr, president and CEO of Syracuse Glass Co., says like many companies, they have seen a steady list of increases over the course of the last five months from most every aspect of the supply chain.

“All glass suppliers have increased prices twice during this period. Metal/aluminum has also been increased twice during this same period of time. In both cases, these increases have been significant depending on mix/product type,” he says, adding that these increases do not include additional surcharges related to the costs of fuel, energy and labor associated with logistics.

“On our end we are trying to do all we can to make certain that we advance initiatives to enhance our efficiencies so that we can absorb some of this in the spirit of helping our client partners,” he says. “Unfortunately, the numbers are significant and can’t be fully absorbed by anyone.”

In addition to glazing industry increases, he points out that they are also seeing increasing costs of other materials, such as wood, which has roughly tripled in some cases since Q4 of 2020.

Material prices in the industry have seen several spikes over the past decade. Key Media & Research (KMR), a leading information provider to the glass industry, tracks historical price trends via its Fenestration Material Price Index (FMPI). The FMPI is an aggregated index of several key industry inputs from the Producer Price Index by the Bureau of Labor Statistics.

According to the 2021 Glass and Glazing Industry Outlook, which publishes the index, fenestration material prices have increased by just over 22% from 2010 to 2020.

There were two significant spans of increases during that time. From the fourth quarter of 2010 to the fourth quarter of 2014, prices increased by nearly 13% before edging down over the next two years.

The fourth quarter of 2015 saw the start of another upward trend, and prices increased another near-11% from then through the third quarter of 2018.

“While our index shows somewhat gradual price increases over longer spans, suppliers such as fabricators and manufacturers might absorb these costs for some time and then eventually issue periodic price increases to their customers,” says KMR director of research, Nick St. Denis. “We had seen our index stabilize a bit in 2019 through much of 2020, but manufacturers and fabricators had continued to report price increases from their own suppliers during that time, which we expect to eventually come out in our index this year.”

St. Denis adds that supply shortages, delays and freight challenges have been hot topics among the industry of late contributing to this trend.