Has the fiberglass industry reached a turning point in its cycle?

First, let's briefly explain what fiberglass actually is.

 

Fiberglass is simply thin filaments drawn from glass. It's lightweight, strong, and heat-resistant, essential for wind turbine blades, lightweight automotive components, home appliances, and circuit boards-a fundamental material in industry.

 

This industry is typically cyclical. When the market is good, production capacity is expanded, generating huge profits; when the market is bad, prices are lowered, resulting in losses, a cycle that repeats every few years. The last downturn began in mid-2022 and lasted for almost three years. Many small factories couldn't withstand the pressure and had to shut down, while large factories struggled to stay afloat.

 

Whether a turning point has arrived depends on the crucial supply and demand relationship, the foundation of the cycle. On the supply side, in previous years, everyone rushed to expand production, causing a surge in capacity and driving prices below cost.

 

At the end of 2024, the industry association issued a self-regulatory agreement, with leading companies taking the lead in avoiding low-price competition and refraining from reckless capacity expansion. In 2025, national production capacity barely increased, a stark contrast to the nearly 10% annual growth rate of previous years-a complete halt to growth. More importantly, many factories have shifted their production capacity from ordinary fiberglass to high-end electronic fabrics for AI servers. This has further reduced the supply of ordinary fiberglass, causing inventory to plummet to around 15 days, far below the normal 1-2 months level, resulting in a sudden shortage.

 

Looking at the demand side, previously relying mainly on real estate and home appliances, these industries have declined in the past two years, but new demand has directly filled the gap.

 

First, the explosive growth of AI computing power has led to an increase in the number of layers on server circuit boards, resulting in a several-fold increase in the demand for high-end electronic fabrics. The shortage is particularly large. Japanese manufacturers are expanding production slowly, and domestic companies are scrambling to replace them, causing prices to rise by nearly 30% since the fourth quarter of last year.

 

Second, wind power is driving demand. The large-scale installation of offshore wind turbines and the increasing size of blades have led to a surge in the use of high-modulus fiberglass, causing prices to rise accordingly.

 

Third, the lightweighting of new energy vehicles is driving a steady increase in demand for thermoplastic fiberglass. With traditional demand not experiencing a significant drop, and new demand experiencing a surge, the demand side has stabilized and continues to rise. Then look at the most direct price signal; the most obvious sign of an inflection point is price increases.

 

The industry began multiple rounds of price increases in 2025, and a second round started in February 2026. Electronic fabric prices rose by 10%-15% monthly, and ordinary roving followed suit, with a cumulative increase exceeding 50%.

 

Prices usually fall during the off-season, but this year, even during the traditionally slow season, manufacturers dared to raise prices, indicating that manufacturers have the financial strength and downstream buyers accept it. This is solid evidence of an upward cycle.

 

Looking at corporate profitability, the gross profit margin of leading companies, which previously fell to around 20%, has now rebounded to over 30%. Contract liabilities have also increased, indicating that downstream buyers are placing orders in advance, and products are in high demand. Stock prices have also reacted; in February, many fiberglass stocks hit their daily limit, showing that funds are acknowledging the inflection point with real money, not just empty words.

 

So, is this inflection point a short-term rebound or a genuine long-term upward cycle?

 

It's highly likely a genuine inflection point, and this trend is likely to continue. On the supply side, orders for specialized weaving machines for high-end electronic fabrics are booked until 2027, and new capacity will take at least 18-24 months to materialize, resulting in tight supply in 2026-2027.

 

On the demand side, AI computing power, wind power, and new energy vehicles are long-term trends, not just fleeting fads. The industry is still consolidating, weeding out smaller factories and focusing on leading companies, leading to a better competitive landscape and preventing the rampant expansion seen in the past.

 

Of course, there are risks, such as an incomplete recovery in the real estate market, the ability of downstream industries to sustain continuous price increases, and the possibility of unauthorized capacity expansion. Overall, these risks won't change the fundamental trend, only the speed of price increases.

 

The fiberglass industry has indeed reached a cyclical inflection point, a hard inflection point confirmed by supply and demand, prices, and profitability. This isn't a short-term rebound, but a formal shift from a downward to an upward cycle, with the next 1-2 years expected to be a period of upward momentum.

 

For those in the industry, this means no more struggling with losses; for those following the industry, this presents a rare and clear opportunity in recent years.

 

Once you understand supply, demand, and prices, you won't need to worry about whether the turning point has arrived. When supply tightens, demand picks up, and prices rise, the cyclical turning point is a certainty.