In September 2020, the glass processing industry is facing the greatest threat ever, mainly due to higher float glass prices, higher freight costs and lower exchange rates. MIGO GLASS analyzes this for three reasons.
1. The COVID-19 virus since January 2020 has caused unexpected disasters for the global glass industry. During the special period, float glass manufacturers had to interrupt the production of float glass for re-production because the glass processing company had not started work and all domestic and export projects in China had ceased. Float glass manufacturers have faced the biggest threat in the past few months. Since May, most glass processing plants have started production, and all domestic and overseas projects, with the exception of China, have resumed. The government's policy of increasing infrastructure construction and demand for glass has been increasing since May. Float glass manufacturers decided to raise glass prices, and by September 2020, float glass was up more than 70 percent from May.
2. The second factor is the decrease in the exchange rate between the US dollar and the RMB. There was a 3% difference between June and September, which caused huge losses, especially for running projects. Many low-margin and low-cost products, such as float glass, laminated glass plates, 3mm tempered glass prices have risen sharply, make it difficult to compete in the international market, and many small processing plants have been without business since June, relying on laminated plate exports.
3. Shipping fees have increased a lot. The main reason is that China's virus controls, many of its factories are exporting on a large scale, and most overseas plants remain closed. To compensate for the loss of empty containers, the cost of transportation has increased by nearly twice the original price. All plants and freight forwarders quoted on CIF terms change almost weekly due to the increase in shipping costs, increasing by 15-25% each time. This trend is likely to continue for at least six months, and it will be difficult to find empty containers in the coming months, as all containers are at overseas ports.
As a Chinese glass exporter and manufacturer, MIGO GLASS is also experiencing great problems, but even in the face of huge losses, we have to maintain the price of the contract, which is our commitment to our customers and maintain long-term relations of cooperation with customers.
