Global demand for flat glass is forecast to grow by 5% pa to
of $94bn by 2020, on the back of strong demand from
manufacturing hubs in south-east Asia and end markets
including manufacturing, electronics and energy.
According to the latest World Flat Glass report produced by
US-based market research agency The Freedonia Group, by the end
of the 2015-2020 period, flat glass demand will be moving 9.6bn
square metres of product pa.
This may lead to issues of availability of supply, analyst
Allison Blackburn, author of the report, told IM.
"Currently, there isn’t enough capacity to meet
our expected total demand in 2020. It is costly to repair
and expand current plants, and even more expensive to open new
float lines, so producers want to be sure of growing demand
before making such commitments," Blackburn said.
This could bring about an uptick in product prices for end
users, as supply gets tight.
"It will likely lead to higher prices at least temporarily
until additional capacity can be opened," she added.
Market drivers
The flat glass sector is expected to keep expanding in size,
albeit the growth rate would be slower than in the 2010-2015
period. The trend is due to a slowdown in demand from China
– the largest single consuming market – on
the back of a deceleration in construction spending in the
country in the mid term.
Currently, flat glass is used in traditional industries such
as architecture and automotive, as well as in newer and
fast-growing sectors including electronics, technology and
energy.
Any such developments in this end market would support
higher demand for raw materials from producers. A number of
industrial minerals are used as feedstock in the production of
flat glass, including silica sand, graphite, feldspar,
fluorspar, kaolin clay and soda ash.
Solar energy applications absorbed 200m square metres of
flat glass last year. This figure is expected to triple by
2020.
Staple end markets such as industrial manufacturing and
automotive will drive the demand, Freedonia forecast.
In terms of geographical footprint, Asia Pacific was, and is
expected to remain, the largest destination hub for the sector.
In 2015, the region accounted for over half of global demand in
value terms.
Asia Pacific is expected to see the fastest growth rates in
the coming years, as the area includes the five
fastest-growing national markets for flat glass –
India, Indonesia, China, Thailand and Vietnam.
According to Blackburn, China accounted for 64% of the total
regional value last year. Growth in the region will be driven
by rapidly-expanding consumer demand for electronic screens
and solar applications, although "solid gains" are expected
also in construction.
Demand in main western markets, Europe and North America, is
meanwhile expected to be hindered by shifting dynamics in
manufacturing, as producers increase outsourcing towards
emerging markets.
China maintains downstream graphite focus
- Slow trade in traditional markets
- Spherical graphite exports surge
- Downstream focus pays off
Shruti Salwan
China’s focus on downstream value-added
expansion has resulted in a surge in the country’s
spherical graphite exports, which registered a rise of 23.5%
year-over-year (y-o-y) against a 2.1% drop seen in natural
flake graphite exports for the seven months ending July
2016.
Uncoated spherical graphite exports for January to July
totalled 19,371 tonnes, registering an upward spike against
15,680 tonnes reported in 2015, according to China Customs.
Natural flake graphite export levels remained depressed at
60,113 tonnes; although marginally down from 61,396 tonnes
reported in 2015, volumes dropped by 19% against January to
July 2014.
Excessive overcapacity alongside decreasing consumption
rates in traditional buying markets of refractories and steel
has seen trades slowing entering into H2 2016.
| China’s flake vs. spherical
graphite exports (Jan 2015 - July 2016)
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| Source: China Customs, Industrial Minerals |
Nevertheless, growing demand for high-purity graphite grades
in emerging technologies and a greater domestic focus on
value-added production has seen the consumption of highly
processed grades become a major source of revenue for Chinese
exporters.
Revenues from the exports of spherical graphite were up 16.6%
y-o-y, while values from natural flake graphite exports were
down by 7.9% during the same period.
Sales from the spherical graphite market made up nearly 58%
of the total turnover from China’s graphite
exports for the first seven months of 2016 – a
proportion which has grown as a result of increases in both the
volume and value of production.
The graph below highlights this persistent growth in Chinese
exports, showing the growing importance of this area of the
market in driving future flake graphite demand.