Supply and demand game + cost support: The short-term weak rebound in the glass market is difficult to change the medium-term shock pattern

1. Supply side: The loose pattern is difficult to reverse, and the production capacity is released to the top

At present, the supply of glass shows a loose trend of "steady and increasing". According to the data of the steel union, the daily output of float glass in the country reached 161,300 tons on October 10, a slight increase from 159,600 tons in early September, slightly exceeding the level of 159,000 tons you mentioned. This increase mainly comes from two aspects: first, profit recovery drives the resumption of production, and the gross profit of the coal-to-gas process has reached 143.93 yuan/ton, promoting the restart of the production line of "blocking the mouth and protecting the kiln" in the early stage; The second is the landing of new production capacity, with a planned daily melting capacity of 5,000 tons of ignition kilns in the fourth quarter, an increase of 35% month-on-month.

Although the policy level releases a signal for capacity optimization - the "Work Plan for Stable Growth of the Building Materials Industry" clearly and strictly controls the new production capacity, the implementation effect is limited. The transformation of coal-to-gas production lines in the Shahe area is mostly capacity replacement, and the environmental protection supervision of Hubei petroleum coke production line has not caused a substantive shutdown, and the industry capacity utilization rate remains at a relatively high level of 80.63%. In the short term, "slightly loose" supply will continue to weigh on price elasticity.

2. Demand side: The peak season is insufficient, and expectations deviate from reality

The expectation of improved demand in the fourth quarter is sharply contradictory to the weak reality. Real estate, as the core downstream (accounting for 70%-75%), saw a 17% year-on-year decrease in the area completed from January to August, directly leading to a decrease in glass demand of about 12%. The peak season performance of "Golden Nine and Silver Ten" hit the worst in seven years, with only 11 days of deep processing orders, down 19.1% year-on-year.

The demand improvement expectations that everyone is concerned about are mainly pinned on two points: one is the implementation of the policy of guaranteed delivery of buildings, and the other is the increase in emerging fields. However, the former is subject to insufficient project funding rate, and the latter's 10.5% year-on-year increase in automobile production (accounting for 15%-20% of glass demand) and 124.58% increase in exports (equivalent to only 4 days of daily output) are difficult to fill the real estate demand gap. It is difficult to fundamentally improve the weak trend of short-term orders.

3. Inventory and cost: High-pressure inventory is restricted and removed, and cost bottoming provides support

High inventory has become the most prominent pressure point in the current market. As of October 10, the inventory in the float glass factory reached 62.824 million heavy boxes, a year-on-year increase of 6.76%, the second highest in the same period in history, of which the inventory in North China surged by 20.63% month-on-month. This is in contrast to the "destocking drive is still there" you mentioned, reflecting the accumulation pressure under the mismatch between supply and demand - the scissors gap between supply growth and weak demand continues to widen.

The cost side presents structural support. The decline in energy prices such as coal and natural gas has made the coal-to-gas and petroleum coke processes profitable, but the average cost line of the industry is still stable at 11.5-12 yuan/square meter (corresponding to about 1,150 yuan per ton). This provides the core logic for your "weak rebound below 1150": when the price approaches the cost line, the willingness of enterprises to support the price increases, and the downside space narrows.

Fourth, the linkage between futures and present: a weak rebound in the short term can be expected, and medium-term shocks are the mainstay

1. Spot market: the mainstream quotation is 1110-1200 yuan/ton, which has continued to fall with the futures market. Traders' shipment pressure has increased, and there is generally a bargaining space of 50-80 yuan/ton in North and East China, and tight spot liquidity has further suppressed market sentiment.

2. Futures market: 01 The main contract is in the predicted 1150-1300 yuan shock range. In the short term, when the futures price falls below 1,150 yuan, it is necessary to pay attention to the opportunity to replenish the inventory in the midstream - the current trader's inventory turnover days reach 45 days, exceeding the historical average by 20%.

3. Policy variables: "Anti-involution" policy is a key variable in the medium term. If measures such as centralized gas supply in Shahe and environmental protection rectification in Hubei are implemented, the daily output will fall back to less than 155,000 tons, and the inventory is expected to enter the de-escalation channel, and the 01 contract may rise to the upper edge of the 1,300 yuan range; If the policy only stays at the expected level, the easing of supply will return the dominant price to the lower edge of the shock center.

5. Later trend prediction and operation suggestions

• Short-term (October-November): The probability of a weak rebound below 1150 yuan is higher, and the rebound height is limited to 1200-1250 yuan. The core driver is cost support and midstream replenishment, but the pressure on inventory accumulation and weak demand will restrict the upside, and it is necessary to closely track whether the production and sales rate can rise to more than 95%.

• Medium-term (fourth quarter): 01 The contract maintains a fluctuating pattern of 1150-1300 yuan. If the year-on-year decline in real estate completion data in November narrows to less than 10%, or the policy introduces detailed rules for capacity elimination, prices are expected to move closer to the upper edge of the range; Conversely, if the inventory breaks through 65 million heavy boxes, it will test the 1100 yuan support level.

• Operation strategy: Spot enterprises can carry out hedging above 1250 yuan; Futures investors can adopt range trading, lay out long orders below 1150 yuan, gradually take profit above 1280 yuan, and set a stop loss of 1120 yuan.
  
  

6. Conclusion

At present, the glass market is in a triple game of "loose supply suppression, cost demand support, and policy expectation disturbance". The weak rebound after short-term prices fall below the cost line is operational, but in the medium term, we need to wait for the substantial improvement of the supply and demand pattern - only the recovery of real estate completion and the clearance of production capacity can break the shock range of 1150-1300 yuan.