Affected by peak season expectations, the glass market is expected to improve

In terms of glass, the pessimism of real estate data is superimposed on multiple factors such as the epidemic situation and rainfall. The overall consumption of glass weakened in August, and inventories accumulated for 5 consecutive weeks, leading to increased pessimism in the market. On August 31, the closing price of the main glass contract 2201 was 2601 yuan/ton, a decrease of 293 yuan/ton or 10.1% from the previous month. Compared with futures, the spot price is relatively firm, and the overall price is stable with small movements. According to statistics from Longzhong Information, the average domestic glass price is 3064 yuan/ton, an increase of 23 yuan/ton or 0.76% from the previous month.

In terms of basis, with the rapid decline of glass futures prices, futures prices have substantially discounted spot prices.

In terms of supply, the supply of glass was relatively stable in August. With long-term high profits, glass manufacturers have less maintenance and maintained a high operating rate. The industrial capacity utilization rate of the month was as high as 90.04%.

In terms of demand, the rapid increase in the price of original films has led to an increase in the production costs of downstream deep-processing enterprises, and enterprises are tight on funds. According to the real estate data released by the Bureau of Statistics in mid-August, the newly started area of ​​real estate fell sharply in July, the market pessimism has intensified, and the regional production and sales are clearly differentiated.

East China has the largest price increase and remains high, leading to a large influx of commodities from surrounding areas, but the overall transaction is weak, and the inventory has increased significantly. Prices in the Northeast are stable and transactions are average, but low inventories have a certain degree of support for prices. The overall shipments in North China are average, and manufacturers mainly ship at stable prices. Affected by the epidemic in the early stage of Central China, glass shipments slowed down, downstream processing plants were cautious in purchasing, inventory increased, and production and sales improved at the end of the month. Affected by the continuous rainfall at the beginning of the month in southern China, downstream goods were cautious, and production and sales were weak. The latter half of the month is approaching the traditional peak season, and the overall price stability of glass companies is strong, and the price performance is firm. In August, some enterprises in the southwestern part of the country were overhauled, the supply dropped, and the glass price rose slightly.

In terms of inventory, glass has accumulated for five consecutive weeks, leading the market to be pessimistic about consumption. However, according to the latest data, the cumulative range of glass has narrowed and subsequent consumption can be expected.

Overall, there is a clear differentiation between production and sales in various regions, but prices are basically stable, and downstream procurement is cautious. It is expected that there will be fluctuations in the short term. As the traditional peak season approaches, glass consumption is expected to improve. Therefore, in the medium and long term, after glass consumption rebounds significantly, it is possible to do more on dips.