Reasons for the serious state of 2008 China flat glass industry

The year 2008 is a year full of harvest for China glass industry, as well as the hardest time for glass industry so far.

1. Demand in downturn. As the state has carried out a prudent fiscal policy and tight monetary policy to slow down the housing, household and home appliance market, the demand for the downstream products declines and processing companies run under their production capacity.

2. A fall in flat glass exports. Boosted by the continued Renminbi appreciation, China flat glass output increases by 11% year-on-year, but the exports drop by 21% in 2008, which adds the pressure on the domestic market.

3. Increased capacity of flat glass in recent years. Last year, 19 float glass lines were built for more than 60 million weight cases; in the first half of 2008, another 9 lines were completed and put into operation, increasing a capacity of 31.58 million weight cases. So far, there are totally 186 float glass lines in China.

4. Large increase in prices of fuels such as heavy oil and soda ash. As the cost on transportation, environment protection, land and labor rises, manufacturing cost of glass goes up.

5. Strong continuous production capacity and low concentration in glass industry intensify the disordered competition.