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Capacity utilisation - glass furnace campaign
What it is
A glass furnace runs continuously for a campaign of roughly 10-15 years before the refractory lining must be rebuilt. It cannot be switched off economically, so it runs at full rate regardless of demand
Rebuilding costs a large fraction of a new furnace and takes months of zero output
Impact on industries
- Production is effectively fixed - a glass maker cannot reduce output in a downturn without destroying the furnace, so oversupply becomes price collapse
- Rebuild capex arrives on a schedule set by the furnace rather than by the market, and can coincide with a weak pricing environment
- The same rigidity protects incumbents, since new capacity is a decade-long commitment that deters opportunistic entry
- Campaign timing across the industry determines supply cycles, so rebuild schedules are a leading indicator of capacity availability