On May 26, the national glass price index closed at 147.09 points, down 3.59% annually, and the price index rose 14.48% year-on-year. The average price of float glass sheets in China was 2230.63 yuan/ton, down 83.10 yuan/ton from the previous month.
Figure 1: Recent Trend
of National Glass Price Index Data Source: Digital Building Materials Network
I. Regional Market Analysis: Glass prices in all provinces fell as expected during the
week. According to the price of float glass in 15 sample provinces and cities, except Sichuan and Shaanxi, the price of other 13 provinces has fallen, and the decline is also expanding. Hunan, Liaoning, Anhui and Shanxi provinces fell more than 5% in the week, with the largest decline of 9.17% in Hunan; Hebei, Guangxi and Tianjin provinces fell between 1 and 5%. See Figure 2 for details.
Figure 2: Changes in Float Glass Prices in 15 Provinces and Cities in China (%)
Data Source: Digital Building Materials Network
II. Industry Supply Analysis: Capacity Supply Unchanged, Inventory Growth Expanded
On May 26, there were 305 float glass production lines in China. There was no change from the previous week. There was no change in production capacity during the week, and the operating rate of float glass enterprises remained unchanged.
Figure 3: Number of production lines and operating rate of float glass in China (%)
Data source: Digital Building Materials Network
Recently, the production and sales of float glass market weakened. During the week, the inventory of float glass production enterprises in China increased by 8.4% on a month-on-month basis, which was faster than that of the previous week. Inventory in central China has accumulated rapidly, with a ring-to-ring increase of 34.06%, while inventory in other regions has also increased to varying degrees, with a ring-to-ring increase of 2-10%.
Figure 4: National float glass enterprise inventory (10,000 heavy boxes)
Data source: Digital Building Materials Network
III. Analysis of cost changes: Soda ash prices continued to fall
sharply during the week, glass raw material and fuel prices continued to decline. Among them, the average price of natural gas market fell by 3.37%, the petroleum coke market stabilized, and the market price rose slightly by 4.80%. Soda ash market fell sharply again, with prices falling by 11.8% annually. According to the cost calculation model of Cement Big Data Research Institute, on May 26, the cost of float glass production line (natural gas) was 1,413.11 yuan/ton, down 5.20% from the previous month, and the cost of float glass production line (petroleum coke) was 1,255.46 yuan/ton, down 2.89% from the previous month. According to the average price of glass, the average profit of natural gas and petroleum coke production lines is 817.52 yuan/ton and 975.17 yuan/ton respectively.
Figure 5: Float Glass Production Line Cost Trend Chart
Data Source: Digital Building Materials Network
IV. Futures Market Observation: Expected Weakening
On May 26, the closing price of the national glass futures FG2309 contract was 1,475.00 yuan/ton. It closed down 107.00 yuan/ton (6.76%). The weak trend of futures price shows that the market is pessimistic about the current and late trend of glass.
Figure 6: Glass Futures Active Contract Closing Price Trend
Data Source: Digital Building Materials Network
V. This Week's Market Forecast: Continue to Fall
Recent glass production and sales are flat, on the one hand, seasonal off-season, on the other hand, the early stage of the end of the middle and lower reaches of the stock. The inventory decline of manufacturers has expanded, the production capacity of production lines is also climbing, and the glass market has entered the downward channel. During the week, the number of areas where the market fell further increased, and the market is expected to continue to fall this week.
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