23 May 2008 23:12 [Source: ICIS news]
By Ben Lefebvre
HOUSTON (ICIS news)--US consumers’ unwillingness to recycle should ensure soda ash producers do not cede domestic market share to scrap glass dealers in the manufacturing sector, industry sources said on Friday.
“I don’t think increases in soda ash will drive us to use more cullet,” said Paul Smith, global procurement manager at Owens-Illinois (O-I), using the industry term for scrap glass. “If we could use more recycled glass in ?xml:namespace>
Glass manufacturers have the advantage over some other businesses in that they can use their own products as a feedstock. That is a potential threat for soda ash producers, since cullet is cheaper and more energy efficient in glass manufacturing.But subpar recycling rates in North America should ensure that cullet does not become more popular after soda ash prices rise by up to $75/short ton (st) later this year. Soda ash currently costs $145-185/st, according to global chemical market intelligence service ICIS pricing.
O-I, the world’s largest glass container manufacturer, buys more than 5m tons of cullet annually for its global operations, Smith said. About a fifth of that is for its plants in the
Cullet is mainly used in the glass container and fibreglass industries, because automotive or construction glass requires higher purity levels than recycled bottles can offer.
Soda ash producers do not expect higher prices to cost them much sales volume in the
But perhaps not surprisingly, scrap glass dealer Tex Corely said he believes rising soda ash prices will drive demand for cullet even higher. The chief executive officer for Houston-based Strategic Materials,
“When they use recycled glass, they substitute it for raw material,” Corely said of his customers. “If soda ash prices increase significantly, the demand for recycled glass should rise.”
Betty McLaughlin of the Connecticut-based Container Recycling Institute concurred, but said cullet could only make more in-roads with domestic manufacturers if more consumers tossed their bottles into recycling bins and not trash cans.
If it comes to a choice between cullet and soda ash, she said, rising prices should make manufacturers look again at using more recycled material.
“It really ought to,” she said. “It’s energy intensive to make glass the first time around. Every time you use glass again, versus going back to raw material, it lowers the energy investment.”
($1 = €0.64)
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