China Fiberglass Manufacturers Benefit from Global Prosperity

Fiberglass is widely and largely used in many industries, such as building materials, petrochemical, automotive, printed circuit boards and other industries. As for abrasives industry, fiberglass also plays a vital role in some abrasives products, such as fiberglass backings for flap disc, and fiberglass cloth for grinding wheels. Since 2014, America and EU economies have further improved, which make overseas fiberglass market increase. It is predicated that from 2014 to 2019, the compound growth rate of global demand for fiberglass is about 6%. Under the lead of wind power and transportation sectors, the growth rate of market demand for fiberglass in China is higher than that in the worldwide. It is expected that in the next five years, the growth rate of domestic demand of fiberglass is between 8% and 10%. The fast growth of domestic market will improve internal consumption of fiberglass, and all fiberglass manufacturers in China will benefit from that. 

Affected by the cold repair and limited new capacity, the global supply slowdown

Relying on raw material and labor cost advantage, the global fiber glass production begins to transfer to China. At present, the domestic fiberglass output accounted for 60% of the global. The global fiberglass industry is oligopolistic structure, and six vendors make contribution to approximately 70% of worldwide production capacity. In 2014, the global new production capacity is limited and mainly concentrated in China. With the acceleration of elimination of backward production capacity, fiberglass production lines enter the cold repair peak, which results in the growth rate slows down to 0%~3%. 

Fiberglass industry into a long boom period, prices expected to continue rise

Owing to the improvement of global supply and demand structure, it is anticipated that in 2015, the utilization rate of production capacity will exceed 90%. It is definite that fiberglass industry is in recovery trend. Because of the limited new capacity, the recovery period is relatively long. From the beginning of 2014 to now, some fiberglass products has increased 10% or so, but the current price is still below the historical average level. In the long term, under the condition of tight supply market, price will possibly rise.