The majority of EU glass container producers will remain exposed to volatility in energy costs over the next 12-18 months, according to a newly published report on 1 February by Moody's Investors Service. The report also predicts that, despite the expected fluctuations in energy prices, demand for glass packaging is likely to remain steady overall in Europe. "Our expectation that volumes in the EU glass container packaging industry will remain steady reflects the fact around 90% of glass packaging products are related to food and beverages, which are largely non-discretionary items," said Anke Rindermann, of Moody's Corporate Finance Group and co-author of the report. "Therefore, we foresee only limited pressure on the operating profitability of rated glass container producers in Europe, despite the weak macroeconomic environment in Europe." Nevertheless, Moody's notes that industry players are not completely immune to volume losses, as evidenced by the 2008-9 global financial crises and recession. It cautions that the industry's high fixed costs make its o challenging for producers, particularly smaller operators, to temporarily scale back production at plants, thus making the industry prone to oversupply. The full report can be purchased for the price of US $550 from: www.moodys.com
