China's Glass Fiber Market Finds Stability After Government Interventions in May 2024

The Glass Fiber market in China experienced a much-needed reprieve in May 2024, with prices finally stabilizing after a period of constant decline. This positive development came against a backdrop of ongoing challenges for downstream Chinese automakers, who have been grappling with weak consumer sentiment and fierce competition as the downstream automotive market rebounded in May which ultimately led to Glass Fiber price stability post-government intervention to provide trade-in subsidy in their older car for new ones before the end of the year.

A key driver of the price stabilization was a strategic policy shift by the Chinese government. The introduction of new subsidies incentivized consumers to trade in their older, less eco-friendly vehicles for cleaner, more energy-efficient models. This initiative significantly boosted demand for Glass Fiber, a vital material used extensively in car manufacturing. As consumers opted for electric and plug-in hybrid vehicles, the demand for Glass Fiber, crucial for lightweight and structural reinforcement in these cars, rose significantly. Beyond government intervention, regional trade events played an unexpected role in boosting Glass Fiber demand. This translated into a 27% year-on-year increase and a 2% month-on-month rise in retail sales of new energy passenger vehicles including electric and plug-in hybrids in China between May 1st and 26th. This surge in demand for new energy vehicles directly impacted the Glass Fiber market, creating a positive feedback loop that helped stabilize prices to settle at USD 761/MT E-Glass Fiber FOB Tianjin, China during May 2024.

While the May Day holidays caused a temporary dip in trading activity, the market quickly bounced back upon resumption. The market's resilience in the face of a short-term disruption further highlights the overall positive environment that contributed to Glass Fiber price stability. Moreover, the anti-dumping measures imposed by the European Commission in mid-July 2023 have contributed to an overall increase in the domestic Glass Fiber availability. These measures were implemented to protect European Glass Fiber producers by making it more difficult for Chinese manufacturers to export at low prices to Europe. Although this move aimed to restrict Chinese exports, yet increased the domestic surplus during this timeframe. Moreover, amidst the Red Sea situation and increased volumes transiting through the region before May 1st, Labor Day, ports in China and Southeast Asia have experienced rising congestion which ultimately increased the domestic supply. As per ChemAnalyst, the market of Glass Fiber is expected to rebound amidst the government intervention through subsidies which could increase consumer demand for new energy vehicles.