First, the demand for policy factors
is closely related to the real estate economy. Since 2000, the rapid development of real estate has led to the rapid expansion of production capacity of related industries. The glass industry chain has expanded rapidly from 178 production lines (including cold repair production lines) in 2008 to 301 glass production lines in 2022. The production capacity has developed rapidly, from about 600 million weight boxes in 2008 to more than 1.4 billion weight boxes now, nearly 2.3 times. With the beginning of 2020, the state vigorously promotes "carbon neutralization", speeds up the elimination of backward glass production capacity and environmental protection policies have become one of the factors affecting market prices. After the epidemic, "stabilizing confidence, stabilizing growth and expanding domestic demand" is imminent, and real estate needs to "recuperate" after several rounds of thunderstorms in 2022. In terms of policy, the Shahe region has recently received the news of full support for the resumption of production of glass production lines with capacity indicators, which will no longer be obstructed. In the future, with the restoration of profits, the resumption of glass production will gradually be put on the agenda. In May, a number of enterprises have announced plans for the resumption of production or ignition in the near future.
2. Supply and demand factors
The direction of glass price is mainly driven by demand. From January to the beginning of April, the demand for housing decoration and completion accumulated in the early stage of the epidemic has been released in a centralized way. As an intermediate link in the early stage of real estate completion, the improvement of demand has led to the centralized replenishment of deep processing factories, the rapid removal of warehouses, the rise in prices, and the participation of traders has boosted the enthusiasm of market speculation. By the middle of April, with the decline of the area of commercial housing transactions in various regions, the replenishment of downstream processing plants has come to an end. On the one hand, the price increase is relatively large, the demand growth rate is less than price increase rate, the downstream has a conflict with the high price, and the purchase is cautious. With the decline of production and sales after May Day, the market lacks confidence in the off-season market, which leads to the continuous decline of glass futures prices in this round. The current situation of glass spot is not yet stable, although the disk has a long admission, but can not explain that it has stopped falling.
3. Seasonal factors
There are obvious seasonal characteristics in the price changes of glass. Seasonally, the peak season of glass is generally from March to May and from September to October, with a short adjustment in the middle, usually in the rainy season from mid-June to the end of July. Prices return to high points at the end of the year, usually in September and October. After that, as the temperature dropped and the construction went down, the glass entered the off-season again. If the current round of price increases in accordance with seasonal factors, has come to an end, the current lack of confidence in demand in the far month, spot prices have also fallen. Short term out of the negative feedback market.
Figure 1: Glass Spot Price
Data Source: Guangzhou Futures Research Center
To sum up, the policy has been relaxed, and the supply will increase in the future. Seasonally, the glass season will come to an end. In the short term, the spot and futures are not stable, which does not mean that they have stopped falling. The key point is to look at the future demand. If the demand goes well, the spot price will be driven to run steadily by the downstream replenishment again, and the price will stop falling and stabilize. However, assuming that the demand is not good, there may be a continuous accumulation of stocks again, and the futures and futures will resonate downward.
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