Emergency in Vial Production Due to Russian Natural Gas Pressure

Global Vial Supply 50% by Germany's Schott AG Hit Hard by Natural Gas Shortage
Surging Gas Prices Make Vial Production Costs Rise Unavoidable... Vaccine Prices Likely to Increase Too

[Asia Economy Senior Reporter Cho Young-shin] Russian natural gas (LNG) is expected to have an adverse effect on the production of COVID-19 and monkeypox vaccine vials (glass bottles). In the worst case, a shortage of vaccine vials could occur, prompting the vaccine-related industry to closely monitor Russia's natural gas supply policy.

[Image source=EPA Yonhap News]

The state-run Global Times reported on the 18th that Russia has reduced the supply of natural gas to Europe to 20% of the pipeline capacity, putting European vaccine vial companies in crisis.

The media cited a German local news outlet (thelocal.de) article titled "Gas crisis pushes German glass manufacturers to the brink," stating that the pharmaceutical and medical industries, including vaccine vials, could be directly impacted.

It mentioned SCHOTT AG, a representative company. SCHOTT is the world's largest glass manufacturer, holding more than 50% of the global vaccine vial market share.

The media explained that products like vaccine vials (neutral borosilicate glass) require high temperatures of 1500 to 2000 degrees Celsius, with natural gas being the main energy source.

A company official said, "We are experiencing an unprecedented situation," and added, "If gas supply is cut off, we cannot produce vials," according to the Global Times.

The Global Times noted that some special glass products are already experiencing shortages and explained that if production lines stop, it would take at least several months to up to two years to rebuild. It also pointed out that if gas supply is interrupted, vial shortages could disrupt the global vaccine supply.

In 2020, after vaccine development, a surge in orders caused a vial shortage, delaying vaccine administration.

The sharp rise in natural gas prices is also expected to inevitably increase the delivery cost of vials, which will directly lead to higher vaccine prices.

In fact, Russian state-owned gas company Gazprom has warned that European gas prices could rise an additional 60% this winter compared to current levels.

Meanwhile, the Global Times reported that SCHOTT AG's local factory in Zhejiang Province, China, was completed in June last year and produces 20,000 tons of products annually.