There’re many building glass trading companies in China,if you have imported glass from China for years,there’s always some companies that you can see everywhere,whether it’s all kinds of B2B platform,Glass & fenestration exhibitions,on the website,and even on your daily emails, these named include Rider glass,Noval glass,Rexi glass(previous Aeon glass),Togen glass ,Paneu glass, etc.Here we introduce the glass trading business history,their advantages &disadvantages and more…
China glass exhibition-morn glass
When the glass trading companies emerged?
The glass trading business in China was once appeared in the 1990th,when the Internet was not developed,it’s quite easy to find customers worldwide,and there’s huge price difference between the China glass price and oversea glass price.
A friend who worked in Jinjing glass for over 20 years told me the ancient glass trading was quite easy ,and quite difficult as well.
Easy,because the price difference made the business very easy to conclude.There was only several float glass manufacturers then,no B2B,no competition,no clear information made high profit possible,it’s quite easy to get over 20%-30% net profit only if you can find the right customers.
Difficult was the internet access, the 64K dial-up access to the internet made the communication very low efficiency,there was no google,no B2B,so search customers on the Internet was quite difficult.
Rider glass office
Qingdao Rider glass,till now is still the largest glass trading company in China,established in 2001 by an Middle East businessman,now the boss has gained enough profit after 2 decades development,their annual sales over 150 million Us dollars and occupy the NO.1 position in the past decades.
Many sales,Purchasing managers,whether they’re in the trading company or in the factory,got the chance to get themselves developed,after gaining the necessary customers and glass sources,they started their own business and numerous trading companies emerged in Qingdao city,that’s the reason why Qingdao companies exported over 50% of China total glass business.
How do they get the profit?
The profit of glass trading companies are complex.
Float glass trading:As there’s no tax return from the government ,all the float glass business was export through “Maidan Export”,which means that the customs declare party is a third party that has no relationship with the buyer and seller,as well as the factory,while the cost,is just USD20/bill.
This allows the factory and trading party export the glass without paying 13% VAT ,and the price is also lower than the China domestic price.
The existing of glass distributors helped them grow up again.Big distributors and wholesalers has large amount of cash and can book thousands tons of float glass in price that is far lower than the market price,and even can get sales return from float glass manufacturers once the order volume reached the agreed point.The float glass manufacturers also offer many policies to ensure distributor’s interests by guaranteeing the makret price 10-20% higher than the distributors before the distributors’ stock was sold out.
float glass export-glass trading-loading
Once the trading companies order volume reached in certain scale,they got the ability to chat with shipping companies and get lower price.For example,if you can ensure 50-100 containers to North America,then shipping companies will offer a 20-40% lower shipping fees than the market price,the saved shipping costs is even higher than glass profit.
International trade-shipping by sea
So for float glass,even though they all claimed that low profit,the actual profit is really awesome.
Processed glass: For processed glass,the government allows 13% tax return to ensure the made in China glass can compete with others in the international market.
Whether it’s acid etched ,frosted glass,tempered glass,laminated glass,insulated glass, the 13% tax return is fixed,so the profit is the net costs and selling price,this is decided by the purchasing costs (depend on the factory they work with) ,and how much tax return they would like to give up.
For example, EXW price USD10/SQM,port fees USD 0.5/SQM,and tax return should be 10/1.13*0.13=USD1.15/SQM, net costs USD10-1.15+0.5=USD9.35.
So ,if selling price is higher than 9.35/sqm, trading companies gained profit,that’s much lower than you purchase directly from glass factory.
So you can see the glass quotation USD9.5,USD9.8, USD10, USD10.5 etc.
tempered glass-export packing
The development progress of trading companies
Initial glass trading are always float glass,it’s easy,just buy and sell,high profit,good business.But after 2005, trading companies found another product that always required- laminated sheets.
6.38mm, 8.38mm,10.38mm laminated sheets which was quite popular in South America,Africa,and middle east.This kind of safety glass offers safety and strength is much better than float glass,so since 2005-2018, laminated glass and float glass account 70-80% of their total orders.
Of course this is for Qingdao trading companies, this is good for them but did became a barrier for the glass processing companies.
During that time,numerous glass factories in North China worked on the numerous laminated sheets orders,they don’t have high end glass orders,for example tempered laminated glass,facade insulated glass that can help the overall processing capability increase,Even the largest glass processing factory,Shandong Yaohua glass,was once process and export over 100 containers laminated sheets in the 2013,and 2014.The low profit products had great negative effect on their development.
laminated glass under production
Usually the profit was just SD0.2-0.3/SQM for 6.38mm laminated glass,some trading companies used low quality float glass,0.3mm and even 0.25mm PVB to decrease the costs and gain order in the fierce competition,the low quality products also created negative impression of China glass,so laminated sheets orders was decreased since 2018,instead ,processed glass products,tempered glass table top,shower door orders increased.
laminated glass in production-laminated glass
After 2020,the COVID-19 caused materials price and shipping fees increased,compared with May,2020,China float glass price has been doubled,shipping fees increased by several times and now Qingdao-Long beach ,shipping fees reached USD13500/40’GP,that means shipping fees is much more expensive than the product itself.
Under this situation,most trading companies profit and order volume decreased much and quite difficult in 2021.
Float glass export: Kibing,XYG ,CNG already built production bases in Africa and Southeast Asia.The float glass production base has changed from China Mainland to Vietnam,several China glassman built float glass production lines there to take advantage of the low price raw materials and labors.Price is much lower than China mainland.
float glass manufacturer-glass factory
Processed glass export: Trading companies are finding ways to get more projects orders with higher profit,But processed glass trading require very professional glass knowledge,especially glass performance,this is a quite difficult for them.
From simple float glass trading,to shower doors,laminated sheets,and to now facade project orders,trading companies here are growing up together with the glass industry.
From export mainland products to invest in oversea,taking advantage of oversea also showed that upgrading of glass industry.
Morn is also a starting-up glass trading company in Qingdao,working with our glass partners,we focus on facade projects and mainly products are high performance insulating glass,and laminated glass applied in facade,we sincerely hope that the shipping market can be back to regular and international trade flourish again.
Download this article here:China building Glass trading industry guide