Glass supply and demand tends to ease, and the trend of high callback continues

1. Glass market and its logic

After the rainy season, the inventories of glass manufacturers fell again under the expectation of peak demand. Therefore, the spot price of glass futures continued to rise sharply. The 2009 contract once climbed to 3163 yuan, and the 2201 contract broke the 3000 yuan mark twice. The continuous rise in the market of glass futures drove the enthusiasm of glass manufacturers to sell for hedging. The sharp rise of glass registered warehouse receipts in mid-July was closely related to the decline of the market of futures.

Second, the recent supply and demand of glass are booming and the long-term demand drops

The futures market has continued to fall from 3,100 yuan, which is affected by the epidemic. More importantly, the expectation of tight supply and demand has changed. On the supply side, driven by high profit levels, glass production capacity maintained steady growth. At the end of June, there were 306 float glass production lines nationwide, with 263 in production, with a daily melting capacity of 173,425 tons, a year-on-year increase of 10.71%. As of the end of July, there were 306 float glass production lines nationwide, with 265 in production, with a total daily melting capacity of 175,325 tons, an increase of 1,900 tons/day or 1.1% from the end of June, and an increase of 8450 tons/day or 5.06% from the beginning of the year. At the beginning of the year, an increase of 14,880 tons/day, an increase of 9.27%.

As of the second week of August, there were 306 float glass production lines nationwide, of which 266 were in production, with a daily melting capacity of 175,825 tons, an increase of 500 tons from last week. Production resumed once within a week, without cold repairs, and no replacement of production lines. Tangshan Lanxin Glass Co., Ltd. completed the first-line cold repair of 500T/D and resumed production on August 8.

In terms of demand, the area of ​​newly-started housing from January to June was 1,12.88 million square meters, a year-on-year increase of 3.8%. The area of ​​newly started residential buildings was 755.15 million square meters, a year-on-year increase of 5.5%; from January to June, the area of ​​land acquired by real estate development enterprises was 70.21 million square meters, a year-on-year decrease of 11.8%. According to Crane data, in July, the transaction area of ​​commercial residential buildings in 29 key monitored cities decreased by 12% year-on-year, 11% month-on-month, and 2% year-on-year. The monthly sales performance of the top 100 real estate companies in July was not as good as the first half of the year and the same period in history. The weak trend on the demand side has gradually spread from land acquisition and new construction to the sales side, and the demand for glass at the mid-to-long-term completion side will obviously be dragged down.

3. Continuous accumulation of inventory of glass manufacturers

According to Zhuochuang Information, the total inventory of production enterprises in key monitoring provinces this week was 20.1 million boxes, an increase of 2.28 million boxes from last week, an increase of 12.79% year-on-year. This week, the accumulation of float glass companies’ inventory has accelerated. On the one hand, public health incidents have restricted the distribution of original films in some areas, and factors such as power rationing and weather also have a certain impact on the demand side; on the other hand, there is a strong wait-and-see atmosphere in the market. In addition, prices are still at a relatively high level in most areas, and the mid-stream and downstream stocks are not enthusiastic, and wait-and-see prices are more favorable. In terms of regions, there are obvious differences in shipments in North China. The production and sales rate in Shahe is low. The inventory of manufacturers has increased to about 1.8 million heavy boxes. The inventory of traders is basically stable. The shipments in Beijing, Tianjin and Tangshan are stable, and the inventory remains low; traffic in parts of East China Still limited. The export volume of most factories in Shandong, Anhui, and Zhejiang declined, and the inventory increased significantly. The performance of production and sales in Jiangsu Province was fair, with a slight decrease in the inventory of individual factories; the poor trading in Central China, the inventory of manufacturers increased to varying degrees, and most of them were still under control. Local shipments improved slightly during the weekend; Southern China is mainly affected by the rainy weather and the wait-and-see atmosphere in the market. Local power restrictions have a greater impact, and the overall production and sales of the company remained flat during the week; shipments in the Northeast region slightly slowed down a week, and inventory of some factories increased slightly, but still at a low level; production and sales in the Southwest region were basically balanced, with little change in inventory, and shipments in Yunnan-Guizhou region Good quantity, basically out of stock

Extremely low inventory has led to an extreme increase in the market. After the stocks of manufacturers rebound, it is difficult to sustain high prices and high profits. The current trend is logical.

Four. Prospects of trading opportunities in the glass market outlook

With the accelerated release of demand at the completion end of real estate, the tight supply and demand trend of glass will continue in the second half of the year; in the long run, the continued steady growth of the supply end is a decisive factor in the market. Recently, Henan, one of the main transfer destinations, has a period of low demand and poor outbound transportation in the Shahe area has constrained the market to a certain extent.

After the short-term correction of the impact of the epidemic on the market, the 01 contract once again returned to the main line logic of a marginal slowdown in the tension of supply and demand, and the high fluctuation of prices and production profits.

The high spot prices in the glass era may not necessarily appear in the gold nine silver ten. Traders are an important part of the glass industry chain. They provide support for manufacturers in the off-season of demand and provide the society with incremental supply in the peak-season of demand. The inventory of traders is very important for judging the market, but the market lacks authoritative statistical data. Every year during the peak season of market demand, the hidden glass inventory of traders, processors and other links begins to be shipped, and the actual spot transaction price trend is not necessarily the best price in the peak season. This year’s peak demand season is affected by public health incidents, and the market should continue to be vigilant in the later period.