Glass soda ash: the wind of "anti-involution" is also blowing?

1. Two recent reviews. The follow-up supply side of glass is expected to be further reduced, and the price will remain strong in the short term.
On July 10, market sentiment heated up sharply, and most domestic commodity futures contracts closed higher. The price of glass futures broke through significantly, once rising by more than 6%, and the price of soda ash futures followed suit.

During the day, the shorts of the main glass and soda ash contracts all significantly reduced their positions by more than 100,000 hands and left the market, and the market volatility intensified.

The glass industry is under the dual pressure of oversupply and weak demand. Driven by the "anti-involution" policy, there are signals of production reduction in leading enterprises. Although the current production remains high, the inventory in the float glass factory hit a more than two-month low this week, and market confidence has been boosted under the pattern of continuous destocking.

At present, the rebound of soda ash futures prices is greatly affected by macro expectations, but the fundamentals lack of continuous upward drive, and the short-term trend is dominated by more shocks, and the rebound is viewed cautiously.

The fundamental data of the soda ash industry is poor, the demand side continues to be sluggish, the inventory in the plant accumulates, and the production and sales rate is slightly lower. Although some units have been overhauled, the overall supply remains sufficient, and the pattern of oversupply and demand continues.

Although the recent favorable policy expectations support, the contradiction between soda ash supply and demand has not been fundamentally resolved, and the price repair still needs to rely on the recovery of downstream demand and the clearing of production capacity.

Hot commodity-"anti-involution" continues to ferment glass soda ash disk changes--New Era Futures Research


2. Adopt a combination of "long glass futures (FG2509) + short soda ash futures (SA2509)" to capture the profit transfer opportunity at the cost end. Pay close attention to the policy window period, especially the implementation of the real estate stimulus policy and the industry's "anti-involution" measures.

In the past two months, glass futures staged a "roller coaster" market, falling 3% on July 1, rising 6% the next day, as of today's close of 1083, the bottom rebounded 9.06%, and the market sentiment switched violently between extreme pessimism and cautious optimism.

On July 1, the sixth meeting of the Central Financial and Economic Commission released a policy signal, which was interpreted by the market as a positive signal for the supply-side reform of the industry.

The news of the production reduction of the photovoltaic glass industry has boosted, and the domestic leading photovoltaic glass companies plan to collectively reduce production by 30%. As of July 4, the daily melting capacity of float glass in China reached 157,800 tons, which was basically the same as the level at the beginning of the year, and the supply pressure may further increase. The float glass production line has extremely rigid characteristics, and the supply adjustment lags behind the change in demand.

Glass demand is highly tied to real estate completions, and the current real estate data continues to be weak, and the area of real estate completions is expected to decline by 7%-13% year-on-year in 2025. As of the end of June, there was no significant improvement in deep processing orders across the country, and most of the orders of enterprises were concentrated at a very low level of 3-7 days.

In the second half of the year, the policy side has become a key variable affecting demand expectations.

As of July 3, the total inventory of float glass sample enterprises in China reached 69.085 million heavy boxes, which was at a historically high level. The inventory in the middle and lower reaches is on the low side, especially the inventory of futures and cash merchants is obviously insufficient.

At present, the price of glass has approached the cost red line, and the profit of the industry has shown a clear differentiation trend. The price of float glass is already in the low valuation range, and the price downside is limited when the cost is no longer declining. Natural gas-made glass continues to be in a state of deep loss, and the general loss of the whole industry is difficult to maintain for a long time, which may force the supply side to adjust.

In 2025, the potential cold repair scale will reach 21,400 tons/day, and the supply-side adjustment has begun to appear.

Hot Reports|Glass: Roller Coaster Opportunities Driven by Policy and Emotion--Anliang Futures Research Institute Anqi Think Tank 

3. Soda ash topic. The summer maintenance continued to advance, the output of soda ash fell year-on-year, and the pressure on the supply side eased. The inventory of enterprises on the inventory side has further accumulated, and the overall pattern of excess still has a suppressive effect on prices. The short-term disk price fluctuates upward due to the alleviation of the contradiction between supply and demand, and in the long run, the fundamental contradiction between supply and demand still exists.

On July 10, the main soda ash futures SA509 rose sharply, closing at 1,231 yuan/ton, up 44 yuan/ton, or 3.70%, with a daily reduction of 187,580 lots.

China's weekly soda ash output in the week of July 10 was 709,000 tons, flat month-on-month, still in the high range of more than 700,000 tons. The weekly capacity utilization rate of soda ash in China was 81.32%, unchanged from the previous month.

As of July 10, the shipments of China's soda ash enterprises were 655,100 tons, down 1.69% from the previous month. The demand side of soda ash is affected by the low daily melting volume of float glass and the anti-involution of the photovoltaic industry, and the production reduction of downstream glass is expected to increase, and the demand side is viewed as empty.

In the same period, the total inventory of soda ash manufacturers was 1.8634 million tons, an increase of 2.98% month-on-month, and the inventory continued to maintain a high level. At present, the sentiment of the spot market has picked up, and the spot price has risen slightly. Although the total inventory is high, the inventory structure in some regions has improved, and the market has a certain short-term game for inventory depletion. Superimposed on the signal of the central meeting on anti-involution, it affects the market sentiment in the short term.

【CCB Focus】Soda ash: under the pressure of high inventory, the rebound is highly limited--CCB Futures

4. Soda ash is still in the period of capacity expansion in the second half of the year, the pressure on the supply side is greater, the growth of float glass production on the demand side is limited, and the cold repair of photovoltaic glass is expected to be strong.

The status quo of the glass industry is still in a state of high inventory and weak demand, and it is difficult to significantly improve the demand side in the second half of the year, and the output is expected to decline slightly in a stable manner.

Soda ash futures prices in January and February fluctuated and rebounded, fell unilaterally from March to June, and still maintained a low trend. The price of glass rebounded in mid-to-early January, peaked in late January and entered a downward channel, and has been repaired recently.

Since 2023, domestic soda ash production capacity has expanded rapidly, with a compound annual growth rate of 10%, and it is planned to add 5.2 million tons of new production capacity this year, and the total production capacity is expected to reach 44.5 million tons by the end of the year. In recent years, the capacity utilization rate of soda ash has maintained a high level, and the monthly output has risen from the second half of 2023, with an average capacity utilization rate of 84.8% in the first half of this year, and the monthly output is basically the same as that of the same period last year.

In the first half of the year, domestic soda ash consumption was weak, with a total of 14.56 million tons of apparent consumption from January to May, a year-on-year decrease of 7.6%; The export performance was good, with a total of 836,000 tons exported from January to May, a significant increase year-on-year. In the first half of the year, the inventory of soda ash plants increased by 361,000 tons compared with the beginning of the year, and the gross profit of production hovered at the low point in recent years.

In the first half of the year, the capacity utilization rate of float glass hit a new low in recent years, with an average of 78.3%, and the output was at a low point in the same period in recent years. Coal-fueled float glass production is still marginally profitable, while petroleum coke and natural gas-fueled production are both loss-making.

Dragged down by the weakness of the real estate industry, float glass consumption was weak, with a total of 23.438 million tons of apparent consumption from January to May, a year-on-year decrease of 11%; In the first half of the year, the overall inventory remained in a state of accumulation, and the current inventory in the factory was 69.085 million heavy boxes.

2025 Soda ash glass semi-annual report: under the surplus pattern, it is still dominated by empty allocation 2025-7-11--Capital Research Beijing Capital Futures


5. The production reduction of the photovoltaic glass industry directly exacerbates the imbalance between supply and demand of soda ash, and the new production capacity of the soda ash industry is expected to be about 2.9 million tons in 2025, and there will still be about 4.8 million tons of new production capacity in 2026. In the future, the soda ash industry will shift from "scale expansion" to "structural clearing", and the production capacity of trona will expand rapidly, and the high-cost ammonia-alkali enterprises will face severe challenges.

On June 29, 2025, the front page article of the People's Daily proposed to deepen the reform of market-oriented allocation of factors, break down local protection and market segmentation, and elevate "involution" competition governance to the core issue of the construction of a unified national market.

On July 1, the sixth meeting of the Central Financial and Economic Commission emphasized the governance of low-price disorderly competition in accordance with laws and regulations, promoted the orderly exit of backward production capacity, and incorporated the three-in-one governance model of "enterprise self-discipline-industry coordination-policy guidance" into the top-level design for the first time.

The photovoltaic glass industry took the lead in responding to the policy, and the top ten domestic manufacturers launched a collective production reduction plan of 30% in early July, which is regarded as the first large-scale practice of the "anti-involution" policy in the manufacturing industry.

Driven by the new energy subsidy policy of "Circular 136", China's new PV installed capacity reached 198GW from January to May 2025, driving global PV module demand to soar by 74% month-on-month in May. As of June 26, the inventory of photovoltaic glass sample enterprises in China reached 1.7117 million tons, and the average inventory days of the industry were 31.78 days. As of July 3, the cold repair capacity of photovoltaic glass reached 5,250 tons/day, and the amount of kiln plugging was 3,350 tons/day.

The float glass industry has a different fate from photovoltaic glass. Float glass is a "high energy consumption, high emission" industry, affected by real estate policies, automobile production and sales, etc., cyclical is obvious, facing a strict restriction of 1:1.25 capacity replacement ratio. Photovoltaic glass belongs to the new energy industry chain, which is affected by the global photovoltaic installation policy, has strong growth, and enjoys subsidies for green building materials.

In the second half of 2024, the industry will independently repair due to losses, but the pace of cold repair will stagnate significantly in 2025, and the daily melting of float glass in the first half of the year will remain in the range of 155,000-160,000 tons, which is relatively low in the same period of the previous year, but the supply is still relatively excessive.

There are three challenges to supply-side reform: first, private enterprises account for more than 70%, CR5 accounts for 38% of the market, and decentralized decision-making makes it difficult to coordinate policies. Second, it takes a certain amount of time from the introduction of the policy to the actual adjustment of the business strategy and the optimization of the production capacity structure. Third, the transformation of production lines below 1,000 tons/day requires an investment of 2-300 million yuan in a single line, and the capital chain of small and medium-sized enterprises is tight.

In-depth thinking on policy implementation: For overcapacity industries, it is difficult to cure the "involution" by relying solely on administrative elimination, and it is necessary to break through the single mode of administrative elimination and build a collaborative system of "technical standard upgrading + market mechanism forcing + policy incentive guidance". Taking the energy efficiency benchmark as an example, the energy consumption standard per ton of float glass can be set at ≤16.5GJ, and a tiered electricity price can be implemented for production lines that do not meet the standard. In terms of capacity replacement, the float production line is allowed to enjoy a 1:1 replacement ratio when it is transformed into photovoltaic glass, reducing the cost of technological transformation. Policy incentives can set up special funds to subsidize transformation production lines and provide green credit. Set a certain number of years of transformation transition period, and implement energy consumption targets in different gradients, so as to avoid "one-size-fits-all" aggravating pains and promote the industrial chain to leap from "scale competition" to "value competition".

6. In 2025, glass output will drop by 7% year-on-year, domestic demand will drop by 7.8% year-on-year, and there will be a surplus of about 860,000 tons. In the long run, glass demand continues to be low. Soda ash is in a state of oversupply, but there is no significant accumulation this year, mainly because of exports. The light alkali was slightly better than expected, and the accumulation was mainly due to the high supply.

The output of flat glass from January to May of the Bureau of Statistics decreased by 5.2% year-on-year, and the output of Longzhong and Zhuochuang from January to June both decreased by 9.7% year-on-year. The daily melting volume was 160,000 tons/day in the fourth quarter of last year, 156,800 tons/day in the first quarter of this year, and 157,000 tons/day in the second quarter. In the first half of the year, there were 10,000 tons of new production capacity and 13 new production lines. Cold repair 8580 tons/day, concentrated in Northwest, East China, South China, and resumption of production in North China and Southwest China. There are 9 production lines in a state of resumption of production, 6 new production lines are in ignition conditions, and 17 lines are in a state of imminent maintenance.
Since the Spring Festival, there has been no obvious cold repair of glass, but the current profit difference may lead to the subsequent acceleration of cold repair.

From January to June, the domestic demand for glass fell by 8.6% year-on-year, and the real estate downturn in 2025 is truly reflected in the demand for glass. From January to May, the cumulative production of passenger cars was 11% year-on-year, and new energy vehicles increased by 40.8%, but it could not offset the decline in demand for precipitous real estate. At present, most companies are in a state of loss, soda ash and energy prices are low, and valuations are at very low levels. The inventory pressure of glass factories is relatively large, and the production and sales rate is low.

In the first half of the year, the output of soda ash was the same as last year, with a weekly output of 714,000 tons, of which the heavy alkali production decreased by 4%, the weekly output was 396,000 tons, and the light alkali production increased by 5.3%, with a weekly output of 318,500 tons. The operating rate of the soda ash method decreased significantly, and the operating rate of soda ash decreased by 2.5 percentage points, with an average of 84.9%. The demand for real estate and photovoltaic glass is difficult to improve, and net exports will increase by 2 million tons this year, mainly due to low prices. The price of soda ash 1150 yuan/ton is at a historical low, but considering the high production capacity and the decline in downstream production, the upward drive is weak. The only bright spot is exports, but only if domestic prices are low enough.