Glass futures prices performed strongly in July, with futures prices once again reaching a historical high of 3,163 yuan/ton, an increase of nearly 13%. In the middle and late half of the year, the Zhengzhou Commodity Exchange announced that it would impose trading restrictions on some glass options contracts to curb speculative demand. Limited by regulatory policies, glass futures have experienced short-term adjustments. However, under the correct guidance of its strong stock fundamentals, the futures market quickly stopped falling and stabilized.

Supply Analysis

In terms of production volume, according to data released by the China Bureau of Statistics, in June 2021, Chinese glass bottle manufacturers produced 87.07 million heavy boxes of photovoltaic glass, a year-on-year increase of 10.3%; from January to June, the production volume of photovoltaic glass was 508.41 million heavy boxes, A year-on-year increase of 10.8%. Thanks to higher manufacturing profits, China's production line restoration and high production in 2021 will lead to an increase in production volume. According to testing, as of July 29, taking coal gas as an example, the price of flat glass was 2,800 yuan/ton, and the profit was about 1,445 yuan/ton; taking gas as an example, the price of flat glass was 3,100 yuan/ton, and the profit was 1,387 yuan/ton. ; Taking petroleum coke as an example, the price of flat glass is 3106 yuan/ton, and the profit is 1788 yuan/ton.

2008-2011 is the peak period of production capacity, according to the 8-10 years of cold repair cycle time, 2021 is still in the cold repair peak period. Data information shows that as of July 28, after the removal of zombie production lines, there were a 1 of 294 laminated glass production lines across the country, of which 262 were in production and 32 were shut down due to cold repairs. The production and sales rate of float manufacturing enterprises is 89.12 per cent and the production volume is 89.88 per cent. In July, the daily melting capacity of the glass industry remained at a stable level of 174100 tons, higher than that of the same period. However, because most of the production lines are fired before the peak period, the production capacity of the fire afterwards is very small. By September, about 1000-2000 tons of production capacity will be ignited, accounting for about 1% of the total production capacity. It is understood that the kiln age of more than 8 years of production line nearly 50. Although the further expansion of profits is still enough to stimulate laminated glass manufacturers to speed up production and manufacturing, delay the cold repair production line or reduce the cold repair time, but the middle and late is likely to stop work anytime and anywhere, laminated glass supply end working pressure is not obvious.

Inventory volume analysis

In terms of inventory, as of July 29, the total inventory output of laminated glass sample companies across the country was 17.2512 million heavy boxes, a month-on-month decrease of 5.33% and a year-on-year decrease of 61.34% (under the same standards, the sample company inventory fell by 5.90% month-on-month) , a year-on-year decrease of 66.34%), and the inventory days were 8.32 days. In June, affected by the rainy season and macroeconomic policies, the replenishment mentality of the middle and lower reaches weakened. However, after trading companies and manufacturers absorbed their own inventories in June, their inventories were at a low level, and stocking up was just to promote the delivery improvement of the original film factory. Since July, flat glass company inventories have decreased. The traditional peak market is expected to rise and fall, the upper and lower reaches have certain replenishment requirements, the lower and lower orders are sufficient, the market just needs strong support, and the inventory of glass bottle factories is expected to be further reduced.

Demand side analysis

In terms of demand, statistics show that the production volume of insulating glass windows will maintain a high growth rate in 2021. The total production volume from January to May increased by 17.7% year-on-year, indicating that the demand for laminated glass is growing strongly. Since more than 70% of laminated glass is used behind the real estate industry, the requirements for laminated glass are reflected in the completion of construction projects. Judging from the development trend of housing construction area data in recent years, the increase in construction area from 2018 to October 2019 showed a continuous upward trend. According to normal progress, these new projects will be completed from 2020 to 2022. However, due to the impact of the 2020 pneumonia epidemic, the completion volume of the real estate industry did not increase year-on-year until the fourth quarter. Judging from the data in the first half of the year, the completion of the real estate industry has accelerated. Data from the China Bureau of Statistics show that the total completed area of ​​the real estate industry in June increased by 66.5% year-on-year and 24.7% higher than in 2019. From January to June 2021, the residential area across the country was 365 million square meters, a year-on-year increase of 25.67%, and the growth rate increased by 9.29%.

It is worth mentioning that in 2017, the General Office of the State Council issued a notice to decide on the establishment of a national-level new area, the Xiongan New Area, to further promote the integrated and coordinated development of Beijing, Tianjin and Hebei. It is the next step after the Shenzhen Special Economic Zone and Shanghai Pudong New Area. another key component. The planned planning area of ​​Xiongan New Area is 100 square kilometers, the mid- and late-stage economic development zone is about 200 square kilometers, and the long-term control zone is 2,000 square kilometers. At this stage, the Northeast region's laminated glass production capacity accounts for approximately 32% of that across the country. However, as the cost advantages mainly flow into East and South China, there is a huge gap in the demand for architectural glass in the Xiongan New Area, and there is a continuous demand for laminated glass in the medium and long term.

Laminated glass industry prospects and future prospects

Although higher profits have increased production volume, the glass production line cannot be upgraded and can only be replaced by production capacity. Therefore, the space for improvement on the supply side is limited. At present, various regions have strict control over energy consumption and environmental pollution issues in glass production. Especially in North China, environmental protection pressure is too great and production line repairs are difficult. In the future, the pressure on the glass supply side will not be great. Compared with the demand side, the progress of midstream and downstream stocking is accelerating, and the delivery pressure of the real estate industry will further increase in 2021. In addition, the "three red lines" of my country's new real estate policy have driven the real estate industry to accelerate completion and market sales to recover. Real estate demand will still have a great impact on laminated glass during the year, and raw film demand is expected to grow faster than supply. goods growth rate. Driven by the demand for a cyclical rebound in August, inventory pressure is likely to continue, and glass bottle prices are likely to fluctuate slightly.

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E-mail: jennifer@abestpg.com

Glass: Kangfu Road, Xiayi County, Shangqiu City, Henan Province

Finishing: Industrial Zone, Duanyuan Town, Huaibei City, Anhui Province