【Glass Big Data】Glass: Anti-involution sentiment fades, and real pressure still exists

Third, the core goal of this policy is to "anti-involution", which aims to solve the structural problems that are difficult for individual enterprises to coordinate, promote the industry to achieve benign operation within a reasonable cost range, and ensure that enterprises obtain sustainable profit space. As of October 13, the profit of coal-to-gas production lines has reached 143.9 yuan/ton, achieving the expected policy goals to a certain extent.

Glass demand is still weak, restricting glass from further upward

Despite expectations of supply contraction, the demand side of the glass market is experiencing a substantial decline. As a material highly bound to the post-real estate cycle, the domestic real estate industry has fallen from a high level, resulting in glass demand that is no longer comparable to the past.

At present, the real estate industry has entered a period of adjustment, with a cumulative year-on-year decrease of 17% in the area of completed houses from January to August, market sentiment is generally pessimistic, and the demand for glass for new house decoration continues to shrink. Although there is a certain increase in other application areas, such as a cumulative year-on-year increase of 12.64% in automobile production from January to August, which partially supports aggregate demand, it is still difficult to offset the huge gap caused by the contraction of real estate demand. At the same time, real estate development investment fell by 12.9% year-on-year from January to August, indicating that glass demand is difficult to fundamentally improve in the short term.

This year's market has vague characteristics of the off-peak season, and the "peak season is not prosperous" has led to a slow pace of downstream procurement. Although some deep processing enterprises have increased their original film inventory to 15-30 days before the holiday, in the context of the continuous rise in raw film prices, more companies have turned to the cautious strategy of "buy as you go". At present, the demand for real estate and engineering is weak, and the downstream stock is sufficient, and the supply side has a number of production lines planned to resume production and ignition, and it is expected that the pressure on the subsequent glass inventory removal will increase significantly. A 700 tons/day production line in Dalian Yaopi resumed production on October 10, and it is expected that 1-2 more production lines will be ignited during the month.

Short-term long and short are intertwined, and downward pressure still exists in the medium and long term

Overall, the market is in a game between policy expectations and fundamental reality. In the short term, although the clear capacity regulation policy has not been implemented, the "anti-involution" policy has laid the long-term tone of supply optimization and provided confidence support for the market. But on the other hand, it is this policy expectation that has boosted the recent price increase and profit repair, but weakened the motivation of enterprises to take the initiative to cold repair, forming the paradox of "expectation delays reality". This core contradiction determines that short-term prices are difficult to form a unilateral trend, and the probability of shock is large.

In the medium and long term, the key to determining the fate of the industry is still on the demand side. The continuous decline of the real estate industry is a core constraint that is difficult to bypass, and before the emergence of revolutionary applications or large-scale demand substitution, the total demand of the domestic glass industry may follow the real estate into a structural contraction channel.