Explore the transformation path of the glass industry in the stage of systematic reconstruction
In July 2025, the Ministry of Industry and Information Technology deployed the work of stabilizing growth in ten key industries. The building materials industry is a pillar industry of the national economy with an output value of nearly 7 trillion yuan and covering more than 150 industries. Recently, under the guidance of the "Work Plan for Stable Growth of the Building Materials Industry (2025-2026)" (hereinafter referred to as the "Plan") jointly issued by the Ministry of Industry and Information Technology and other departments, the transformation battle with "adjusting the structure, optimizing supply, and eliminating backward production capacity" as the core has been fully rolled out, and the glass industry is moving from "single production control" to the systematic restructuring stage of "multi-dimensional optimization".
From "de-production" to "de-low-value"
At present, our country's glass industry governance has bid farewell to the extensive stage of simply compressing output and entered a new cycle of "all-round optimization of production capacity, energy and products". The policy signal clearly points to "structural optimization" and the implementation ruler is clear, aiming to solve the core dilemma of "structural surplus and high-end shortage" in the industry and promote the transformation of the industry to high-quality development.
The reconstruction of governance logic at the policy level is the core guidance for industry transformation. Chai Lijun, general manager of Zhejiang Jiayue Salt Chemical Co., Ltd., said that the "Plan" juxtaposes the three tasks of "capacity optimization, energy upgrading, and product upgrading", marking the shift of industry governance from "single production control" to "system quality improvement". The "Plan" further puts "strengthening industry management and promoting the survival of the fittest" at the top of the top ten key tasks, and clarifies that "it is strictly forbidden to add flat glass production capacity, and new projects must formulate capacity replacement plans", blocking the channel of low-end capacity expansion from the source.
Fan Guosheng, general manager of lithium carbonate, soda ash and glass futures investment of CITIC Huanqiu Trading Co., Ltd., added that the policy releases a rigid orientation of "strict control of total volume and structural optimization", and the measures are more precise, not only comprehensively using quality, environmental protection, energy consumption, safety and other standards to draw a clear line, but also focusing on the role of market mechanisms, encouraging backbone enterprises to set up green and low-carbon transformation funds with social capital. For emerging fields such as photovoltaic glass, the core goal is no longer to "control scale", but to "improve the overall profitability of the industry".
It is worth noting that unlike petrochemical and other industries, the glass industry presents the characteristics of "different contradictions in subdivisions". Hu Peng, senior analyst of China Securities Construction Investment Futures Energy, believes that the policy needs to "prescribe the right medicine" for the pain points of the three major fields of float, photovoltaic and electronics.
Dragged down by the downturn in the real estate market, the demand for float glass continues to shrink, and the core task of the float glass industry is to "optimize stock" and eliminate backward production capacity. At present, there are still old kilns below 1,000 tons/day in traditional production areas such as Hebei and Shandong, and most of the environmental performance is below C level, and the resistance to exit is greater. Hu Peng said that the overheating of photovoltaic glass investment has led to new overcapacity, and 8 new lines will be ignited in the first three quarters of 2025 (net increase of 5,000 tons in daily melting), but the gross profit margin of the industry is only 5%~8%, and the whole industry will fall into losses from 2024, and it is necessary to establish a "capacity risk early warning mechanism". As for electronic glass, its high-end production capacity is short, folding screens and in-vehicle displays have driven the demand for ultra-thin glass (UTG) to increase by 30% year-on-year, but the high-end self-sufficiency rate is only 60%, 30% of the market is occupied by Japanese, American and European companies, and insufficient investment in core technology and equipment has become a key bottleneck.
It is worth mentioning that at present, the core yardstick of policy implementation has been clarified. Define backward production capacity with "energy efficiency red line" and "environmental protection red line" to ensure accurate governance. According to the "Energy Efficiency Benchmark Level and Benchmark Level in Key Industrial Areas (2023 Edition)", the energy consumption benchmark of production lines of different scales is clear: the energy consumption benchmark of production lines above 800 tons/day is 12 kg of standard coal/weight box, and the energy consumption benchmark of 500~800 tons/day production line is 13.5 kg of standard coal/weight box. It is estimated that by the end of 2020, 8% of the flat glass production capacity (equivalent to 16,000 tons of daily melting) is still below the energy efficiency benchmark, and this part of the production capacity will become the focus of future elimination.
At the environmental protection level, it focuses on upgrading the fuel structure. At present, 15% of coal-to-gas and 15% of petroleum coke fuel in float glass are gradually being replaced by natural gas. However, Zhang Linglu, senior analyst of resource products at Everbright Futures, suggested that although some production areas (such as Shahe coal and gas, Hubei petroleum coke) meet the current environmental protection requirements, if clean energy transformation is promoted, it may lead to rising costs and short-term supply fluctuations, and policy support is needed to smooth the transition.
Although the policy focuses on "optimizing supply", the core constraint point of the current industry is still on the demand side. In this regard, Zhang Linglu explained that on the one hand, glass production has gotten rid of the label of "high energy consumption and high pollution", and the energy consumption indicators of enterprises in Shahe area far exceed the national standard and reach the "green factory" standard; Petroleum coke in Hubei is mostly medium and low sulfur coke, and emissions and energy consumption are controllable. On the other hand, the industry's daily melting volume has dropped from a high of 176,200 tons in 2024 to the current 161,300 tons, and even if it rebounds slightly in late September, it is still at a low level in recent years, and the pressure on the supply side to the market is limited.
In her view, the weakness of the demand side has more significant constraints on the transformation of the glass industry. "On the one hand, terminal demand is slow to improve; On the other hand, the start-up, orders and capital problems of downstream processing enterprises are still limited. Zhang Linglu said that terminal procurement and rigid demand consumption are limited, which further exacerbates the mismatch between supply and demand in the glass industry.
The "polarization" of core areas is obvious
Since 2025, the glass industry as a whole has fallen into the dilemma of "declining production and profit pressure", and the three core fields of float, photovoltaic and electronics have shown a distinct "polarization" trend - the surplus of traditional fields has intensified, the demand for emerging high-end tracks has grown rapidly but the supply is insufficient, and multiple imbalances such as regional layout, industrial chain resilience, and enterprise structure have also been further highlighted.
Shou Jialu, an analyst at South China Futures, said that the current "structural imbalance" and "supply mismatch" of the glass industry are mainly concentrated in three dimensions, which directly restrict the healthy development of the industry. First, the product and competition structure are unbalanced, high-end products (such as ultra-thin electronic glass, special functional glass) rely on imports, the industry market concentration is low, and the homogeneous competition of enterprises is fierce, resulting in meager overall profits. The product sales radius is limited, and the linkage between domestic and foreign markets is insufficient, making it difficult to alleviate internal excess pressure through external demand. second, the resilience of the industrial chain is insufficient, and the upstream raw materials are constrained by the supply of key resources such as quartz sand, and the bargaining power is weak; The development of downstream deep processing links lags behind, the output value accounts for less than 10% of the whole industry, and the overall anti-risk ability of the industrial chain is weak. third, the structure of technology and production capacity is rigid, the product homogenization of most enterprises is serious, and the investment in R&D and innovation is insufficient; There is "rigidity" in capacity adjustment, which cannot respond to changes in market demand in a timely manner, resulting in a long-term mismatch between supply and demand.
During the interview, the Futures Daily reporter learned that the new production capacity of the glass industry in 2025 will be obviously tilted towards high-tech and high-growth expected segments, while the traditional float glass field will enter the stage of "capacity optimization and replacement", showing the distinctive characteristics of "new hot and old cold".
"At present, the three high-end tracks are attracting a continuous influx of capital." Shou Jialu said that photovoltaic glass, as the core area of new production capacity, has benefited from the promotion of the global and China's "dual carbon" strategy, and the long-term growth expectation of photovoltaic installed capacity is clear, which has become the focus of capital layout; New energy and high-end special glass include lithium battery aluminum-plastic film glass (benefiting from the explosion of new energy vehicles and energy storage market), automotive canopy glass and coated glass (in line with the trend of the "new four modernizations" of automobiles), electronic cover glass (used in smart phones, tablets, in-vehicle displays, etc.) and other "new tracks" have risen rapidly, and the demand growth rate is significant; With the implementation of building energy-saving standards by the country, the energy-saving renovation market for existing buildings has gradually emerged, and the demand for high-performance products such as low-E low-emissivity glass, vacuum glass, and insulating glass has grown steadily, and energy-saving architectural glass has become a "potential stock" in the industry.
In contrast to the high-end track, ordinary float glass production capacity is accelerating optimization through policy guidance. In the context of the deep adjustment of real estate demand, there is no net increase in production capacity in the field of float glass for ordinary buildings, and the national "capacity replacement" policy clearly requires that new production lines must first eliminate the same or even more backward production capacity to curb the expansion of low-end production capacity from the source.
Although the industry as a whole has transformed to high-end, the "differentiation" of the three major fields of float, photovoltaic and electronics has further intensified, and each faces different development difficulties.
Among them, the contradiction between the shrinking demand for float glass and the rigidity of production capacity is more prominent. According to the data, from January to August 2025, the national flat glass output will be 648 million weight boxes, a year-on-year decrease of 4.5%; the completed area of houses decreased by 17% year-on-year, which directly led to a decrease in glass demand of 6%~8%. Although the 7.8 million sets of "guaranteed delivery" plan can theoretically drive the demand for 280 million weight box glass, Chai Lijun bluntly said: "The lack of funding rate restricts the actual pulling effect, and the short- and medium-term completion data is difficult to stabilize, and the industry valuation has fallen to a historical low." ”
Fan Guosheng said that although photovoltaic glass is a high-end track, it has fallen into the dilemma of "low-end surplus". "In the first half of 2025, prices will fall to record lows, and backward production capacity will be restored one after another; After the collective production cut of leading enterprises by 30% in July, the price rebound from August to September was only a 'short-term supply and demand adjustment'. Even if the new installed capacity of photovoltaic in the world is expected to reach 596GW (including 215G~255GW in China), it is still difficult to digest the previously expanded production capacity. He said.
"The demand side of electronic glass has performed well (such as folding screens and vehicle displays have driven a 30% year-on-year increase in demand for ultra-thin glass UTG), but the shortcomings on the supply side are prominent." Hu Peng said, "Its high-end production capacity accounts for less than 20%, UTG melts only 800 tons per day, and 30% of the high-end market is occupied by Japanese, American and European enterprises; Mismatch between production capacity layout and deep processing clusters - North China and East China concentrate 55% of production capacity, while deep processing links are transferred to South China and Southwest China, resulting in logistics costs accounting for 6%~8% of the selling price, further weakening the competitiveness of local enterprises. ”
"Tripartite coordination" of policy, enterprise and market
In the face of the dilemma, the glass industry is exploring multiple breakthrough paths. From enterprise transformation to market empowerment, from technological upgrading to layout optimization, an all-round change is being staged.
During the interview, the reporter learned that traditional glass giants are accelerating their cross-border layout.
According to Chai Lijun, Qibin Group's revenue in the first quarter of 2025 will be 3.484 billion yuan and net profit will be 470 million yuan, and its expansion in the field of photovoltaic glass will bear initial results; CSG A, Ancai Hi-Tech and other companies have entered the photovoltaic track, while Luoyang Glass has integrated production capacity through the "mergers and acquisitions within the province + new construction outside the province" model and entered the photovoltaic track.
These practices also confirm the transformation path summarized by Chai Lijun: technically promote one kiln and multiple lines technology, improve the yield and reduce energy consumption; The products focus on high-end categories such as ultra-white glass and TCO photovoltaic backplane, and the gross profit margin of such products is 25%~40%; The layout has shifted to the frontier of our country's South China, Southeast Asia and other markets.
Not only that, regional policies are also making efforts, and local governments empower small and medium-sized enterprises through subsidies and incentives. In this regard, Fan Guosheng suggested that national policies can learn from this model to provide special subsidies for clean energy transformation (such as coal to gas), and at the same time establish a cross-regional capacity replacement mechanism to guide the concentration of production capacity in advantageous areas.
In addition, the futures market has also become an important booster for the transformation of the glass industry. Hu Peng said that price discovery and risk management functions are profoundly affecting industry decision-making. In his view, glass futures prices continue to fall in advance to guide enterprises to shrink production; Hedging helps companies lock in profits during the price rebound window. More innovative is the "delivery warehouse + bank" model, with a standard warehouse receipt pledge financing interest rate of 120BP lower than traditional loans, providing low-cost funds for enterprise technological transformation.
"Although futures tools play a significant role in the restructuring of the glass industry, they still face the challenge of 'contract standardization and product differentiation' for high-end production capacity." Shou Jialu said that the subject of glass futures contracts is ordinary construction float glass, while high-end glass (such as electronic glass, photovoltaic glass) is significantly different from the benchmark product in terms of composition, process, value and use.
However, she also proposed a solution: high-end glass manufacturers can indirectly guarantee their operations through "production cost and related product profit hedging". For example, the production of photovoltaic glass requires a large amount of soda ash and electricity (natural gas), and enterprises can sell glass futures and buy soda ash futures in the futures market at the same time to lock in the production profit of "glass-soda ash". At the same time, the transparent price curve provided by futures contracts in the next few months to one year can provide forward-looking signals for capacity planning (expansion/contraction, cold repair), "When the futures price in the far month continues to be lower than the current spot price (discount structure), it often indicates the market's pessimistic expectations for future supply and demand, and enterprises will tend to postpone the commissioning of new lines or arrange cold repairs in advance; otherwise, it may increase confidence in expansion. She said.
Taking float glass companies as an example, Chai Lijun introduced that before the glass price plummeted in 2024, the futures discount had released an early warning signal, and companies that hedged in advance avoided large losses. The data shows that the loss of glass companies participating in hedging is 23 percentage points lower than that of non-participating enterprises, and futures tools have become the "stabilizer" of risk management.
In the view of the interviewees, under the guidance of policies, the structure of the glass industry will usher in profound changes. It is predicted that the proportion of float glass will drop from 65% to 55%, and the proportion of high-end categories such as photovoltaics and electronics will rise to 30%; The proportion of production capacity in North China decreased by 8 percentage points, and South China, Southwest China and Southeast Asia became new growth poles. On the product side, five high-end categories such as ultra-thin glass and TCO conductive glass will become the main body of profits, and the profit per ton of leading enterprises is expected to stabilize at a high level.
For enterprises, Chai Lijun believes that its core competitiveness is reflected in the proportion of high-end production capacity, clean energy ratio, and risk management coverage, and these "three rates" will determine the right of enterprises to survive in the era of quality dividends. This judgment has been confirmed by the market, and leading enterprises such as Qibin and CSG have shown stronger anti-risk ability in the cold winter of the industry through technological upgrading and the use of futures tools.
The glass industry, which stands in the deep water area of transformation, is undergoing painful structural restructuring. As Chai Lijun said: "Only by achieving a dynamic balance between supply and demand through survival of the fittest can the industry truly return to a healthy development track." "The inflection point of 2026 is approaching, and the outcome of this transformation battle will determine the final position of China's glass industry in the global value chain.
Industry Watch | Break the "shackles" and see the future
Kungang
China is the world's largest glass producer and consumer, and its production has long accounted for half of the world's production. However, our country's glass industry is facing unprecedented structural pressure. Beyond the current predicament, to achieve the transformation from "quantitative accumulation" to "qualitative leap", from "big" to "strong", is a must-answer question related to the survival and development of glass enterprises.
The glass industry is deeply bound to the real estate industry, making it a typical cyclical industry, with high supply and sharp "structural imbalance" in demand. On the one hand, there is a surplus of low-end float glass sheets, and enterprises are stuck in the quagmire of "price war"; On the other hand, glass used in electronic information display and other fields is heavily dependent on imports. Taking ultra-thin electronic glass as an example, multinational companies such as Corning in the United States and Schott in Germany have monopolized the market for a long time, and our country is still facing the risk of "stuck neck" in the most cutting-edge fields such as flexible displays and high-generation line liquid crystal substrate glass. This pattern of "low-end squeezing out of the head, high-end out of reach" is the core obstacle to the improvement of industry value.
The key link in glass manufacturing is the high-temperature melting of silicate, and its melting kiln must operate 24 hours a day, which is a veritable "energy black hole". Fuels (mainly natural gas, high-calorie coal and petroleum coke, etc.) usually account for 30%~40% of the total cost of production, and glass companies are extremely sensitive to energy cost fluctuations as the profits of the glass industry fall significantly. The glass produced by natural gas as fuel has high light transmittance and good heat treatment and weather resistance, which should be regarded as high-quality production capacity, but due to the cost continues to be higher than the industry average, the crisis of "bad money driving out good money" needs to be solved urgently.
The glass industry as a whole is facing rising environmental and carbon cost pressures, which also provides an opportunity to improve its current predicament. It is estimated that the carbon emissions of our country's glass industry account for about 2% of the total industrial emissions of the country, and it is an indispensable emission reduction subject in the industrial sector. Increasingly stringent environmental regulations put forward strict requirements for the emission of pollutants such as sulfur dioxide and nitrogen oxides, and the carbon emission trading market that will be fully implemented in the future will directly price carbon emissions, further increasing the operating costs of enterprises. Excess low-end products are bidding on the bottom in the fierce market competition, lacking bargaining power, and the "high energy consumption and high emission" development model of traditional building materials such as architectural glass is unsustainable.
To solve the above dilemma, the glass industry must carry out a profound change throughout the entire industry chain and build a new development paradigm with high-end, green, intelligent and service-oriented as the pillars.
High-end is the fundamental way out for the glass industry to break through. We must resolutely shift resources from surplus low-end fields to high-end fields with high added value. For example, electronic information display glass is a key basic material for national strategic emerging industries, and Kaisheng Technology, a subsidiary of China National Building Materials Group, has made a breakthrough in this field, successfully producing 30 micron thickness flexible foldable glass, which is the "head goose" of glass technology innovation, and the "goose array" of innovation and development of the glass industry still needs to be formed. In 2023, the Ministry of Industry and Information Technology and other six departments jointly issued the "Guiding Opinions on Promoting the Development of the Energy Electronics Industry", which clearly stated that it is necessary to "accelerate the development of special electronic materials...... Improve the capacity supply and strategic guarantee of photovoltaic glass, ultra-thin high-transparency glass, flexible glass, etc.", which provides clear policy guidance for the development of high-end glass.
Greening is not a cost, but a "ticket" to future competition, and its core is to carry out an "energy revolution". In the short term, we will continue to promote the "coal-to-gas" and "coke-to-gas" of melting kilns to reduce carbon emissions and pollutant emissions. In the medium and long term, we must actively explore disruptive low-carbon technologies such as hydrogen combustion and total oxygen combustion. For example, SCHOTT has successfully tested the use of 60% hydrogen blending in pharmaceutical glass furnaces, which is a key step towards zero-carbon glass production.
Intelligence is an endogenous tool to enhance competitiveness and achieve refined management. In the feeding, cutting, edging, inspection, packaging and other links, we will comprehensively promote industrial robots and automation equipment to achieve "unmanned" production workshops, reduce human error, ensure product consistency, and meet the challenge of rising labor costs. By deploying a large number of sensors and using artificial intelligence and big data models, real-time simulation and optimal control of the temperature, pressure, atmosphere, and liquid flow of the melting kiln can be stabilized, the kiln age can be extended, and energy consumption can be reduced.
Servicization is the key to breaking through the trap of "product homogenization", locking in customers, and improving the value chain. Enterprises should not only be suppliers of original glass sheets, but should transform into "end-user problem system solution providers". For example, the architectural glass business can be extended to energy-saving scheme design, customized processing, installation guidance, lifelong maintenance, energy-saving effect monitoring and certification (such as applying for green building materials three-star certification, green building certification, etc.).
To sum up, the transformation and upgrading of China's glass industry is a comprehensive and profound systematic project involving supply and demand, technology, mode and ecology. In the future, the leading enterprises in the glass industry will be modern enterprises with high-end materials as the cornerstone, green technology as the gene, digital intelligence as the nerve, and service solutions as the extension. They are no longer just manufacturers of materials, but also builders of green life and enablers of the intelligent era. This road is the only way for China's glass industry to bid farewell to "big but not strong", move towards "big and strong", and finally achieve high-quality development. (Author's affiliation: Founder Medium-term Futures)
