Glass Fiber Prices Up Rmb 800/ton, Multiple Firms Adjust.

Recently, several glass fiber enterprises, including China Jushi (600176.SH) and Taishan Fiberglass, issued price adjustment notices, implementing restorative adjustments to the prices of electronic-grade yarn and electronic fabric. The price of electronic-grade fine yarn was adjusted by RMB 800 per ton, and the price of electronic fabric was adjusted by RMB 0.3 per meter.

Industry insiders stated that this round of price increases was mainly due to the long-term low prices of electronic-grade yarn and fabric, coupled with rising costs of raw materials and energy. Many enterprises have experienced weak profitability or even long-term losses, and the price increases reflect their urgent need to improve profitability.

So, will this round of price increases be implemented? Liu Yang, a glass fiber analyst at Zhuochuang Information, told China Times that from the supply side, market supply is controllable in the short term, and there are plans to commission new production lines in the future. However, given the significant demand gap for high-performance low-dielectric electronic-grade yarn this year, it will drive up the prices of ordinary electronic-grade yarn to some extent. The short-term price increases are expected to be gradually implemented.

Prices at Low Levels

Recently, at least nine enterprises, including China Jushi, Taishan Fiberglass, Chongqing Tianhuan, and Guangyuan New Material, announced price increases of RMB 800 per ton for various types of glass fiber electronic-grade yarn (G series) and RMB 0.3 per meter for various types of electronic fabric. China Jushi stated in its price increase notice that the new prices will be implemented from March 1st.

This reporter learned that this round of price increases is a continuation of the price adjustment trend for multiple glass fiber products since the first quarter of 2024, with prices still at low levels. Starting from the first quarter of 2024, products such as general purpose E-glass rovings, wind power rovings, chopped strand, thermoplastic rovings, and plied rovings have seen price increases in March, June, and November.

According to Zhuochuang Information data, as of the end of February, mainstream prices for domestic electronic-grade yarn rose to RMB 8,500-9,000 per ton, with the monthly average price hovering around RMB 8,556.86 per ton, a slight increase of 0.09% from the previous month. The average price of electronic fabric in February increased by 0.54% compared to the average price before the Spring Festival, with a year-on-year increase of over 17 percentage points.

Regarding the future price trend of the glass fiber market, Liu Yang told this reporter that in the second quarter, a few more electronic-grade yarn production lines are planned to be commissioned, and with an increase in supply, the price increase space is expected to be limited in the future. The new prices in March are likely to be implemented successively, and the level of losses in the industry is expected to be slightly improved. However, under cost pressure, with the gradual recovery of terminal market demand and favorable policy support, medium to long-term prices are expected to continue to rise slightly. However, there is uncertainty in the future implementation, and follow-up is needed.

Related Companies Incurring Losses

From the 2024 earnings forecasts, some listed glass fiber companies have already incurred losses.

Shandong Fiberglass indicated that it expects a net profit of RMB -0.78 billion to -1.17 billion in 2024, a year-on-year decrease of RMB 1.8 billion to 2.23 billion. The company explained that the downstream market for glass fiber is still in a slump, with glass fiber product prices rebounding slightly but remaining at low levels, and product sales have not met expectations.

International Composite Material pointed out that due to weaker-than-expected demand for glass fiber during the reporting period, glass fiber product prices are still low. The company's main product prices have declined year-on-year, exchange gains have declined year-on-year, asset disposal gains have declined year-on-year, and profitability has declined compared to the same period last year. The company expects a net loss of RMB 280 million to 372 million in 2024, a year-on-year decline of 151.33% to 168.19%.

Although China National Materials Group Corporation (Sinoma) has not incurred losses, its performance has also declined significantly. The company's main product prices have declined year-on-year, resulting in decreases in net profit attributable to shareholders, net profit excluding non-recurring items, and basic earnings per share compared to the same period last year. Net profit attributable to shareholders is expected to be RMB 634 million to 950 million, a year-on-year decrease of 57.26% to 71.48%.

As an industry leader, China Jushi has also experienced a decline in performance. According to its third-quarter report for 2024, the company's revenue increased but profit did not, with revenue reaching RMB 11.632 billion, a year-on-year increase of 1.81%, while net profit attributable to shareholders was RMB 1.533 billion, a year-on-year decrease of 42.66%.

Amidst industry losses or declining profitability, this price increase is seen as positive news for capital. On the day the price increase notice was issued, the stock prices of listed glass fiber companies fluctuated. China Jushi's stock price rose by 6.14%, and Sinoma's stock price rose for three consecutive trading days, with a total increase of 22.88%.

Supply and Demand Balance is Key

Glass fiber is a new type of inorganic non-metallic material with excellent properties such as lightweight, high strength, corrosion resistance, electrical insulation, and heat insulation. Its downstream sectors include growth areas such as automotive lightweighting, wind power, photovoltaic, and 5G, as well as cyclical areas such as infrastructure, construction, and pipes and tanks.

Specifically, glass fiber rovings serve as reinforcing materials and, after multiple processing steps, can be made into composite materials that are widely used in various downstream sectors of the national economy. Glass fiber fine yarn and electronic-grade glass fiber fabric are mainly used in the copper-clad laminate sector, which is widely applied in electronic information, industrial control equipment, and other industries, including circuit boards and electronic components for robots.

This reporter learned that the issues faced by glass fiber enterprises in recent years are related to the significant expansion of production capacity by companies in the industry. As prices have fallen and demand has weakened, the glass fiber industry has entered a dark period.

Looking ahead, industry insiders believe that with the sustained strong demand for 5G base stations and AI servers, the demand for electronic-grade yarn, especially low-dielectric electronic-grade yarn used in high-frequency and high-speed copper-clad laminates, is expected to continue to grow. At the same time, the expansion of the replacement policy is expected to drive the recovery of downstream consumer electronics demand, and demand from emerging areas such as AI is expected to continue to grow rapidly. Electronic-grade yarn is poised to enter a new upswing cycle.

It should be noted that low-dielectric electronic-grade yarn is a high-end product, and international competitors have significant advantages in terms of technological maturity, product quality, and market channels. In contrast, domestic enterprises still lag in these aspects, especially in the production and market development of high-end products. To narrow the gap, domestic enterprises need to increase R&D investment, optimize production processes, improve product quality, and actively expand into international markets to enhance global competitiveness.

From the supply side, the outlook is not optimistic either. It is reported that the glass fiber industry plans to add a significant number of production lines in 2025, with a total designed capacity of approximately 715,000 tons and a net new capacity of about 655,000 tons, mainly concentrated among a few large enterprises.

Some analysts also believe that the release of new capacity will not happen overnight, and some production lines are still in the trial operation stage, with limited actual impact on market supply in the short term. The supply-demand relationship in the glass fiber market is expected to be balanced in the coming years, but attention still needs to be paid to the progress of new capacity commissioning and changes in market demand to ensure healthy and stable market development.