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Glass demand side may still have strong support in the first half of the year

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[China Glass Net] At present, spot prices of float glass in major regions of the country remain firm, mainly due to the strong role of the demand side. The sales trend of commercial housing usually leads the glass demand, that is, the glass demand will not come into being until one and a half years after the sale of commercial housing, while the peak of the current round of commercial housing sales growth occurred in April 16, and the glass demand side may still have strong support in the first half of 17 years.

Recently, the price of heavy soda ash, the main raw material, has been steadier than before. On the one hand, the whole industry has been on the margin of profit and loss. Some joint soda enterprises have started to lose money. It is difficult to reproduce the situation that soda manufacturers increased their shipments by drastically reducing their prices in the earlier period. On the other hand, the daily melting volume of glass is still increasing, and the downstream demand side of heavy soda ash has always been strongly supported. Before March, some soda plants had made operations such as production reduction and overhaul because of their excessive inventory. Overlapping the continuous consumption of the demand side, a large number of heavy soda sources accumulated in the early stage of the market had been gradually consumed. It can be seen that the starting rate of domestic soda plants increased significantly in March and was higher than the same period in previous years. It is unlikely that the price of heavy soda will fall sharply again in the short term, and the profit margin of glass manufacturers will stabilize in the short term. At present, the spot price environment faced by glass manufacturers is still relatively good. Driven by the current profit level, there are still cold repair or new production lines in the short term.

In terms of inventory, the current inventory level is significantly lower than the same period in 15 years, basically the same as the same period in 16 years, and the inventory pressure has not yet been highlighted. In the short run, glass producers are more willing to bid, and prices are expected to remain firm, even though demand is still boosting and inventory pressure is not high. It is worth noting that in the second half of the year, glass demand will gradually weaken, and the lag of the start-up rate will make it difficult for glass production to shrink within 3-6 months, thus accelerating the weakening pattern of supply and demand, and then prices may face significant pressure to reverse.


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