Recent glass spot split, spot decline and disk rebound. From the perspective of fundamentals, glass is currently in the off-season, with insufficient demand-side support and lack of good news, high inventory neutrality, and manufacturers' price reduction and promotion under high profits; the market rebounded after the previous decline, with the logic of policy efforts and low valuation repair under the weak economic recovery, and there is no upward drive from the perspective of fundamentals. It is expected that the glass spot will continue to be weak, and the disk will oscillate in the range of 1450-1600.
(1) The spot market is declining, and the short-term demand is difficult to improve. Recently, the spot price of float glass has declined, the focus of market transactions has shifted downward, the overall production and sales of manufacturers are general, and most of the stocks continue to accumulate. The price of large plate in Shahe market dropped by 100-120 yuan/ton, the price of small plate was relatively stable, and the price difference between large and small plates was narrowed. The expected improvement on the demand side is limited, the support of terminal orders is insufficient, especially the demand on the northern engineering side is relatively weak, most of the middle and lower reaches maintain a small amount of replenishment rhythm on demand, the wait-and-see mentality is still strong, superimposed on the current high temperature and rainy weather, the contradiction between supply and demand exists seasonally. It is expected that the price of float glass will continue to be weak in the short term, waiting for the arrival of the traditional peak season of glass in the third quarter, and there may be seasonal improvement in supply and demand.
(2) The logic of real estate completion is still deducing. Completion data continued to rise in May, with the cumulative completion area in January-May being 19.6% year-on-year and the previous value being 18.8%. From the stock point of view, the demand for guaranteed delivery has not yet been released, and with the support of the policy of "guaranteed delivery", glass has just needed support in the short term. At present, the completion of the project relies more on policy-side support, the willingness of real estate enterprises to invest has not improved, and the decline in investment continues to expand. If the later policy falls short of expectations, the demand for glass will face a blow. On the contrary, if real estate funds improve or macro expectations strengthen, glass prices can be repaired. Follow-up attention was paid to the introduction of real estate policies and the improvement of housing enterprises'funds.
(3) The market is volatile, and there is no upward support for short-term fundamentals. Glass futures prices rebound at the bottom, the bull logic is that the current economic repair is slow, the expected policy side is strong, the discount spot valuation is low, glass has room for upward repair. However, from the basic point of view, the short-term supply and demand pressure of glass is greater, there is no upward support, the spot is also in a downward trend, and the inventory is neutral and high. Glass futures shocks are expected to be weak, with a range of 1450-1600.
Generally speaking, the current glass is in the off-season, the demand side support is insufficient and lack of good news, the spot price is declining, and the inventory is neutral and high. The logic of the recent rebound in the glass market lies in the expected weak economic recovery, policy efforts and low valuation repair, but the glass fundamentals are not driven upward. Glass spot is expected to be weak, disk shock operation.
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