In a message dated 03/17/2000 11:30:01 AM Central Standard Time,
[log in to unmask] writes:
<< Dear Technetters,
I writing here on the behalf of several concerned parties, including some
European OEMs, CEMs and PCB Manufacturers.
Some European manufacturers are worrying about Base Material Shortage, by
shortage it is understood extended delivery Lead-Time.
Some have seen extended delivery Lead-Time increased by 2 or 4 weeks, on
some more complex Base Material, lead time can run to 14 weeks in some
particular instance.
Do you Technetters from all over the world and from the USA, are witnessing
such increase in delivery time?
Are worrying about it?
Some of you are considering shutting off the plant for some days like some
are considering doing in Europe if it doesn't improve?
Would you comment on your concerns ?
Is there any Base Material Manufacturers here who could give us the status
for their companies?
Please do not over-react to this posting and place big orders as this would
only cause the situation to get worst for most likely no real reason.
PLEASE no "Snow-Ball" effect.
Thank you
Very Best Regards
Roland
Info-Elec Ltd.
Golden Eyes? - Live and Let Buy... www.PCB007.com
Providing Global e-Business Solutions For The PCB Industry
Roland Jaquet - Tel. +41-22-880-0405 - Fax. +41-22-880-0409 - Cell
+41-79-203-3723 >>
Roland,
Below I've pasted an article I found on the internet about the glass fiber
industry. It is somewhat dated though (1996). But from reading the article,
there was quite a shortage back then, and according to the article many glass
companies (Owens Corning, PPG, etc.) were working hard and opening new plants
to increase capacity.
Surely, it wouldn't take 4-years to ramp-up to meet demand would it?...or
perhaps todays demand was underestimated...
-Steve Gregory-
MARKET FORECAST: GLASS FIBER INDUSTRY SURGES FORWARD
Demand Outstrips Supply as Glassmakers Try to Catch Up Joined at the hip to
the economy, the glass fibers industry is surging again. Used in applications
ranging from satellite parabolic antennas to household insulation, the demand
for glass fibers is so strong it exceeds supply. Producers are pushing hard
to increase capacity. They expect supply pressures to ease late in 1996, but
for the long term, they hope to achieve balance in supply and demand.
Globally, the industry had a record year in 1995. Sales reached $4.3 billion,
up 9% from $3.9 billion in 1994. That increase is largely due to burgeoning
markets in the Pacific Rim and South America, with the double-digit growth in
developing countries. The US market grew a more modest, but healthy 5.5%,
from 1.04billion lb in 1994 to 1.1 billion lb in 1995. The previous year
showed record growth, with a 4% increase to 1.04 billion lb in1994. Since
1990, US glass fiber production has grown by more than 50%, from 706 million
lb/yr in 1990. In the past two years, there was extraordinary demand in all
major markets. The strength of the marine market caught glassmakers by
surprise. It had previously dropped 50% from the 1980s. The automotive,
trucking, construction and anticorrosion markets all benefited from the
strong US economy in 1994.
* SUPPLY SHORTAGES In fact, demand was so high it outstripped supply. Last
year's growth would have been higher had it not been for supply shortages. In
1994 and 1995, glassmakers worked flat out to meet demand. The Composites
Institute (New York, NY) notes that growth of composites will be limited due
to glass fiber shortages. Composite use in 1995 was almost 3180 billion lb,
up 4.4% over 1994. The institute predicts 2.7% growth in 1996, to more than
3260 billion lb.
* EASING SHORTAGES The three major glassmakers are adding capacity:
Owens-Corning (Corning, NY) is adding 682 million lb/yr at its various plants
around the world between now and 1998. Vetrotex CertainTeed (Valley Forge,
PA) will increase glass fiber capacity20% by late 1996. The company is
rebuilding one furnace out of five at its Witchita Falls (TX) plant. PPG has
added a new facility in Chester (SC) with an investment of $50 million.
Initial capacity will be 60 million lb/yr and it will add capacity as needed.
The company points out that this is the first new plant that any major
producer has built in North America in the past 15 years. PPG also has a
facility in Shelby (NC) that is running at maximum capacity of 400 million
lb/yr. Increasing capacity to catch up with supply demands is standard in an
industry that is so dependent upon the general economy. There is always a
long lead time in production and spending decisions must be carefully
targeted since costs are high for increasing capacity. No glassmaker wants to
add capacity, only to see the market crash. Leveling the fluctuations is a
goal for Owens-Corning. The company hopes to end the up-and-down process of
increasing capacity following price increases. It is increasing capacity
through product rationalization and manufacturing simplification. For
example, the Owens-Corning plant in Jackson (TN) is now streamlined. The
plant produces only one product -- wet chopped strands -- which once were
made in three facilities. The company is also aligning itself with growth
markets and focusing on creating a strong global supply network. Through
moves like these, Owens-Corning hopes take some of the cyclicity out of its
business. Presently, it is producing 220 million more pounds than in 1994.
Its capital expenditures totaled $200 million in 1994and 1995, and it plans
an additional $105 million.
US GLASS FIBER DEMAND AND GROWTH PROJECTIONS (lb/year)
1990 706 million
1994 1.04 billion
1995 1.1 billion
1996 1.14 billion
1997 1.19 billion
1998 1.24 billion
1999 1.29 billion
2000 1.34 billion
* PREDICTIONS FOR GROWTH Efforts to manage the cycles are prudent. Still, the
glass fibers industry will remain closely tied to the economy. As such, there
is always the risk of a downturn in the future. Given that possibility, US
glass fiber production is expected to increase4%/yr over the next five years
on an average annual basis. In three primary areas of the glass fibers
market, growth expectations hover around 4%. In the electrical/electronic
segment, growth is expected at 3.5%/yr through 2000. A large portion of this
business is in printed circuit boards, which is shows steady but slow growth.
Fiber optics shows high growth, in double digits, with rates as high as 20%
to 30% in certain regions. Other uses include telecommunications drop wires
and satellite antennas. In transportation, look for growth rates of 5%/yr
through 2000. There is tremendous growth potential in this segment as
composites become more accepted. A prime advantage is their ability to
consolidate parts and simplify manufacturing. Owens-Corning points to the
superplug and radiator support in the Ford Taurus, which previously needed 20
metal parts made at 20 workstations. Now one composite part is snapped into
place, offering weight savings and simplified manufacturing along with a
reduction in labor and equipment. CertainTeed highlights a recent success at
the Composite Institute's Expo: A big prizewinner was a refrigerated railcar
molded with fiber-reinforced plastic. This is an application that didn't
exist previously. Other applications include helicopter blades and armored
vehicles and tanks. In a third major area, construction, 4% growth rates are
expected through 2000. Infrastructure applications worldwide provide the
highest growth in replacing existing concrete and steel. Building uses
include tubs, shower stalls and roofing, and non building applications
include utility poles, transmission towers, and piping.
* GLOBAL OUTLOOK The worldwide picture for glass fibers is strong. Global
demand was 3.3 billion lb in 1995, and growth rates should average 5%/yr
through 2000. In Western Europe, where close to a billion lb of glass fibers
were sold in 1995, growth is expected at 5.5% over the next five years. In
Eastern Europe, including the former Soviet Union, demand for glass fibers
reached 300million lb in 1995 but, at 3%/yr, the outlook is less optimistic
because of the political situation. In the Pacific Rim, where 800 million lb
were sold in 1995,growth could exceed 10% over the next five years, not
including Japan. Representing about half the Pacific Rim, Japan's use may
grow a modest 2%/yr. Predicted growth in Korea may be 8% to 10%.In Asia and
in South America, new markets have opened up. Developing countries are
becoming more affluent and want utilities, roads, bridges and other
infrastructure. In certain countries, rates could jump as high as 15% to 20%.
Leap frogging is apparent in these developing areas where end users choose
composites for first-time builds, thereby skipping metals altogether. In
telecommunications, there is leapfrogging over copper, straight to
fiber-optic filaments.
* PRICE INCREASES: 1996 Glass fiber prices are returning to levels reached
during the1980s. Prices had peaked in 1988 and 1989, during the last
highpoint in demand. During the early 1990s, prices eroded when global supply
exceeded demand. In 1995, following the demand recovery, the average price
returned almost to 1988-1989 levels. On average, reinforcements cost $1/lb.
Glassmakers expect more increases, but at a slower rate in 1996 than in
1994-1995.
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