What is the current status of the fiberglass industry?
Fiberglass is an inorganic non-metallic material with excellent performance. It has many types and its advantages are good insulation, strong heat resistance, good corrosion resistance and high mechanical strength. It is made of glass balls or waste glass through high-temperature melting, drawing, winding, weaving and other processes. The diameter of its single filament ranges from a few microns to more than 20 microns. Each bundle of fiber strands is composed of hundreds or even thousands of single filaments.
In 2021, downstream demand will drive the industry's production capacity, output and overall profit level. In 2022, affected by multiple factors such as economic growth slowdown, geopolitics, price increases of bulk raw materials and poor supply chain circulation, the fiberglass market situation fluctuated, and the overall trend showed a trend of high at the beginning and low at the end.
In the first half of 2022, the industry continued to be highly prosperous. Supported by the market and overseas demand for thermoplastic products, the average price of products remained high. After entering the third quarter, the industry's new production capacity was released, and there was a period of overcapacity, and product prices fell. In the fourth quarter, driven by demand in downstream new energy vehicles, infrastructure, and wind power, sales recovered. In terms of imports and exports, the supply of products in overseas markets has declined due to geopolitical factors. The export volume of domestic fiberglass and products has increased year-on-year, while the import volume has decreased.
In 2023, the domestic economy will recover slowly, and the recovery of demand in the downstream market of fiberglass and the downstream operating rate will be significantly lower than expected; at the same time, the industry's production capacity is still increasing, supply and demand are facing imbalance, inventory is increasing, production and sales are facing pressure, prices are falling, and the market is sluggish. According to data from the China fiberglass Industry Association, the domestic production of fiberglass yarn will be 6.87 million tons in 2022 and 7.23 million tons in 2023, a year-on-year increase of 5.2%.
In 2023, the main business income of fiberglass and product manufacturing enterprises above designated size decreased by 9.6% year-on-year, and the total profit decreased by 51.4% year-on-year. From the perspective of industry development trends, in the short term, there are continuous pool kiln production lines in the industry entering shutdown and cold maintenance, and the growth rate of production capacity is expected to decline, alleviating the imbalance between supply and demand and inventory backlog; in the long term, although affected by the macroeconomic cycle and short-term supply and demand fluctuations, the downstream application areas of fiberglass continue to expand and the scale of demand is expanding.
