The downstream demand recovery of the hottest glas

2022-07-25
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The recovery of downstream demand for glass is worth looking forward to.

dragged down by the sharp fall in gold, last week, the glass futures broke through the first line support of 1400, and fell into a weak bottom seeking pattern in the short term. The author believes that the second quarter is the peak sales season for glass spot goods, and the recovery of downstream demand is still worth looking forward to. It is not appropriate to be overly pessimistic in the medium and long term

the demand for glass mainly comes from the real estate market. After the Spring Festival, the introduction of the "national five articles" and its detailed rules has upgraded the regulation of the real estate market again, and the price of glass has rapidly dropped from around 1600 points before the festival to below 1500 points. Recently, the average gross profit margin of coated paper in China caused by the sharp decline of precious metals is ⑵ In 59% of the overall decline in the commodity market, the glass futures price fell below 1400 points, breaking down. Overall, the impact of systemic risk on glass futures is obvious. Although the macro negative factors have been weakened recently, they have not been completely eliminated

since this year, seven float glass wires have been ignited in China, mainly distributed in North and central China, and the ignition time is concentrated in February to March after the Spring Festival. As the glass production line has a time lag (about a month) from ignition to production, which exposes the weak links of products, the market supply pressure in these regions increased at the beginning of the second quarter, and the inventory of enterprises rebounded. In the first ten days of April, the inventory of domestic float glass enterprises was initially applied successfully in practical work, with 29.12 million heavy containers, a month on month increase of 320000 heavy containers, and the absolute value of inventory reached a new high since May last year. Under the high pressure of inventory, the enthusiasm of glass enterprises to raise prices has been frustrated. From April to now, the prices of two zigzag experiments of 5mm float glass in Shanghai have fallen instead of rising, basically unchanged from the same period last month. The worry of "slack season" is emerging

although the current glass spot market is relatively weak, the author believes that it is not appropriate to be overly pessimistic about the future market of glass. First of all, after this round of decline, the current glass futures price is close to the historical low of 1288 yuan/ton. In the medium term, there is limited room for decline. Secondly, the introduction of the "five national policies" released the accumulated demand of the property market in the early stage. In March, the transaction area of commercial housing in 30 large and medium-sized cities in China reached a record high of 24.08 million square meters. This year, the overall real estate market will show a tight supply pattern, which is conducive to stimulating real estate enterprises to take land and start construction. According to the latest real estate data released in March, although the growth rate of the sales area of commercial houses dropped compared with the first two months of the first quarter, the growth rate of the construction area most related to the demand for glass still maintained growth. In March, the cumulative growth rate of the domestic housing construction area increased by 1.7 percentage points to 17%. Finally, the seasonal fluctuation characteristics of the glass industry are obvious. The second quarter is the traditional peak season of glass consumption, and the probability of upward price is large. From a long-term perspective, the current operating range of glass prices is higher than that of the same period last year, and the industry is in the stage of recovering from the bottom. In the second quarter, with the further release of downstream rigid demand, the pattern of weak recovery of glass will not change

in a word, the author believes that the short-term glass futures will find the bottom hard in a weak macro environment, and then shake and consolidate at 1300 points. In the medium and long term, with the gradual release of downstream demand, the glass fundamentals will be improved and the glass price will rise. The content of this article is for reference only and does not constitute investment advice. Investors operate accordingly at their own risk

Zhonghua glass () Department

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