China: over-supply of glass production

There is an over supply in the domestic sheet-glass market and a serious duplication of production lines for electrolytic aluminum, according to China“s State Economic and Trade Commission (SETC). Th…

There is an over supply in the domestic sheet-glass market and a serious duplication of production lines for electrolytic aluminum, according to China“s State Economic and Trade Commission (SETC). The SETC held a meeting on 26 February to discuss supply and demand, as well as to release investment information, for the country“s industrial sector. The SETC warned that the overabundance in the production capacity of glass and electrolytic aluminum is causing investment risks in these sectors to climb. Clear as glass Amid the stockpile increase in the glass industry, profits continue to decline because of falling prices. Consequently, more glass manufacturers are posting losses, with some even plunging into serious business difficulties. The SETC said that since 1999, there are 39 new float-glass production lines, including those being planned or under construction. These lines will have a combined annual capacity of 87.9 million weight cases that equals 4.4 million tons (one weight case is equivalent to 50 kg). Additionally, China“s sheet glass production reached 204 million weight cases (10.2 million tons) for 2001, a 14.5% increase over the previous year. Ma Liqiang, director of SETC“s Economic Operations Bureau, said: “The oversupply status as well as the price decline and profit deterioration in the glass industry will continue in the upcoming two years. Except for the high-grade float glass, which are not available in the domestic market, investments in common float glass production will face huge risks.” Gan Zhihe, director of the SETC“s Investment and Programming Department, said: “China will not approve any new regular float-glass production lines for the time being and will strictly scrutinize new projects in sheet-glass manufacturing. Local governments will stop any projects that are planning to expand the production capacity of current sheet-glass plants” Xie Xuren, SETC“s vice director, said at the meeting that China has ranked first in the world in terms of electrolytic-aluminum production, but the duplication of production-line construction is serious.