Dalian Flat Glass Export Situation in the First Half of the Year

According to customs statistics, in the first half of 2012, the export volume of flat glass in Dalian Customs was 2.239 million square meters, which was 53.7% lower than the same period of last year; the value was US$6.396 million, which was a decrease of 48.2%; the average export price was US$2.9 per square meter. , rose 11.5%.

1. In the first half of 2012, the export of flat glass in the Dalian Customs District showed the following major features:

(a) The monthly export volume continued to drop. Since the beginning of this year, the monthly export volume of flat glass in Dalian Customs area has dropped significantly compared with the same period of last year, and it has entered the low export period. Among them, the month of April exports 306,000 square meters, a decrease of 69.9%; May exports in the month 316,000 square meters, a decrease of 54.2%; June exports in the month of 343,000 square meters, a decrease of 29.8%.

(b) General trade leads exports. In the first half of this year, the Dalian Customs District exported 1.436 million square meters of flat glass by general trade, a decrease of 59.9%, accounting for 63.7% of the total export volume of flat glass in Dalian Customs during the same period. In the same period, the special customs supervision area exported 805,000 square meters, a decrease of 35.8%.

(3) Private enterprises are the first main force for exports. In the first half of this year, private enterprises in Dalian Customs District exported 1.227 million square meters of flat glass, a decrease of 10.6%, accounting for 54.8% of the total export volume of flat glass in Dalian Customs during the same period. In addition, foreign-invested enterprises exported 765,000 square meters, a decrease of 43.9%.

(d) Peru, New Zealand and South Korea are the major export markets. In the first half of this year, the Dalian Customs District exported flat glass to Peru to 746,000 square meters, a decrease of 22.4%, and exported 331,000 square meters to New Zealand, an increase of 1.1 times; and to South Korea, it exported 258,000 square meters, an increase of 1.2 times. The exports to the above three areas together accounted for 59.6% of the total exports of flat glass in the Dalian Customs during the same period.

Second, the first half of this year, the main reason for the decrease in flat glass export volume in the Dalian Customs area was that (1) the downstream industry demand weakened and the company's production power was insufficient. From the perspective of demand, the real estate industry has been strictly controlled and the loosening policy of various localities has been repeatedly denied by the central government. The consumption of the glass market has been at a relatively low level. In addition, the development and export situation of the automotive industry is not Optimism led to a significant decline in processing orders in the domestic glass industry. In the first quarter of this year, the flat glass industry suffered a net loss of 770 million yuan, and the amount of losses in the first four months was reduced to 130 million yuan, while the profit for the first four months of 2011 was 2.35 billion yuan. Glass manufacturers have a strong willingness to lose money, and the actual production capacity of water-reserve and cold-repair power continues to slow down year-on-year. The year-on-year growth rate of flat glass production has also dropped to a historically low level, and the glass supply end has continued to shrink [2]. As a result, export volume has dropped from the same period of last year.

(B) The industry contraction effect of supply appears to result in a slight increase in prices. Affected by the industrial downturn, a large number of production lines have stopped production or switched production due to losses since the fourth quarter of 2011. The inventory level of 270 float glass production lines nationwide decreased compared with the previous month, totaling 27.29 million weight boxes, reducing 230,000 weight boxes, and declining by 0.84% ​​from the previous month, showing a continuing downward trend[3]; the glass industry currently suspends kiln operations. The rate was at an all-time high of 26%, stopping the production line to 70 [4]. The contraction effect of ordinary glass supply began to appear, and even if the current demand did not rebound significantly, there was still a positive change in prices and inventories. The contraction in supply due to the suspension of production lines and the slow recovery in demand led to the recent decline in flat glass stocks and a slight recovery in prices.

Third, the current issue of China's flat glass industry is worthy of attention (a) the rapid growth of production capacity, production costs, corporate economic efficiency decline. The glass industry generally takes 3-4 years as a volatility cycle, and often in a good situation, some companies blindly invest in expansion, and then fall into a trough. Overcapacity brings industry risks. Since 2009, the production capacity of float glass in China has grown rapidly. In 2011, 21 new production lines were added, with an added capacity of 101 million weight boxes. It is estimated that about 15 production lines will be put into operation in 2012, with an additional capacity of approximately 63 million weight boxes [5]. Glass has the characteristics of continuous uninterrupted production. The stable release of production capacity significantly exceeds the growth in demand from the downstream markets such as real estate, automobiles and exports. In addition, since the first half of 2010, the rising cost of raw material fuels such as soda ash, coal, heavy oil, natural gas, and electricity, as well as the increase in financial costs such as staff salaries, have led to rising production costs for glass companies. Because the glass manufacturing companies manufacture mostly homogenous products, some companies are willing to cut prices to lower prices in order to reduce inventory. The contradiction between the supply and demand of the entire glass industry is outstanding, and the price continues to be low. The disorderly development has led to increased competition in the industry, and disorderly market competition has led to a decline in the overall industry profitability.

(b) High energy consumption, heavy pollution, and increased pressure on resources and the environment. Although China's existing flat glass production process has been in line with international standards, there is still a big gap between product quality and energy consumption and international standards. For example, the average energy consumption of float glass in China is 7800kJ/kg, which is 20% higher than the international average of 6500kJ/kg. At the same time, due to the fact that the flame furnace with coal and heavy oil as the main fuel accounts for about 90%, the production process can easily cause air. Pollution [6]. At present, major foreign glass manufacturing enterprises have multiple float production lines in China in the form of acquisitions, holdings, sole proprietorships, joint ventures, etc. The expansion of their production capacity has exacerbated the domestic energy shortage, and has also caused the loss of large amounts of raw material resources. The glass industry has the tendency of accelerating the transfer to the domestic market, which further exacerbates domestic energy consumption and environmental protection issues and is extremely detrimental to the sustainable development of the industry.

(III) Exports are facing more trade barriers and trade frictions. In recent years, with the continuous expansion of the export volume of flat glass in China, the risk of encountering trade protection is also increasing. In 2010, countries such as the Philippines, India, South Africa, Australia, Brazil and Ukraine successively adopted anti-dumping investigations or safeguard measures against China's flat glass. In March 2011, South Korea announced that it will extend the period of anti-dumping measures against float glass produced in China by 3 years and continue to impose import duties of 12.04% to 36.01%. Brazil launched an anti-dumping investigation against colorless flat glass in China in August 2011 after starting an anti-dumping investigation against colorless glass with a thickness of 2 mm to 19 mm imported from China in July 2010. The trade barriers faced by glass exports have rapidly increased, and the rise of international trade protectionism has further deteriorated the glass export environment. The ongoing trade war has also reminded us from another perspective that primary products and low-price export strategies can easily fall victim to trade protectionism in the international market. The high-end products can not only obtain high added value, earn extra profits, but are less affected by price competition and trade protection.