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Cost Increases Loom in Glass Fabric Market

Post Time:Apr 12,2012Classify:Industry NewsView:205

Seeing PCB manufacturing perform more positively in the first quarter than previously anticipated, the supply chain has reacted by building up their stocks to meet demand. This is a good thing for everyone and should have a positive ripple reaching well into the second quarter. Many believe this positive up-trend will last throughout 2012.

 

However, for every market uptick, there is an opportunity for those in the supply chain to raise prices. Some increases are valid. The price of copper soars. We can all see it on the financial leaderboards. Suppliers must adjust prices to account for their costs. Not doing so only serves to weaken important segments of the supply chain that are often already working at relatively low profit levels.

 

And then there is the opportunistic take. An unanticipated increase in demand, coupled with an already constrained supply, presents a limited opportunity to increase profit levels. These times can serve to offset a company’s less-than-stellar performance in the previous quarters, as well as helping fill the coffers for the leaner times going forward. It’s the way the global economic system turns. And far be it from Taiwanese and Chinese glass yarn manufacturers to overlook just such an opportunity.

 

According to a story published earlier this month in the Taiwanese news source www.cnyes.co, Taiwanese glass providers such as Glotech, Fulltech Fibers, and the glass fiber division of Nanya Fabrics recently issued price adjustments of 5 to 8% to their customers in February, and are poised to do so again before the end of March. Adding insult to injury, Asia’s largest glass filament provider, Nanya, has decided to take down two of its furnaces for “routine” maintenance over the next few months. These two furnaces together comprise approximately 26% of the glass fiber supply into China and Taiwan, according to www.cnyes.com. This will certainly widen an already significant supply gap.

 

On the China end of the glass supplier spectrum, its biggest filament supplier, Taishan Fabrics, has apparently stopped supplying glass to the greater marketplace as it works to meet internal demand, supplying a new factory of its own.

 

What does all of this actually mean? The near-term glass fabric supply appears to be in real jeopardy, and this will undoubtedly cause both laminate and PCB manufacturers some price-point pain. Laminate suppliers and their customers should brace themselves for what may be a coming storm. The market should begin to see price increases fueled by the glass situation by the third quarter of this year.

Source: www.pcbdesign007.comAuthor: shangyi

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