Float Glass Prices in Central China Surge 10.6%, Reaching Year-to-Date High, but Future Momentum Lacks

Last week, float glass prices in the central China market rose significantly due to reduced supply and market sentiment, reaching the highest increase of the year. However, from the perspective of the future market, because the market's support for just demand is relatively limited, the power of prices to continue to rise is insufficient.

As of October 31, 2024, the price of float glass in the central China market has reached 1,250 yuan per ton, an increase of 120 yuan, or 10.6%, from last Thursday. This marks the second time since October that the market has ushered in an upward shift in the focus of trading. Compared with the first price increase, the price increase has increased by 30 yuan/ton. The main drivers of this price increase include:

First of all, with the continuous release of water in Wuhan Yijun and Yaohua (Luoyang) Glass Longhao line in the latter half of the year and the conversion of super white production in Liling Qibin Line 5, the daily production of float white in the central China market has reached 19,200 tons/day, a decrease of 0.185 million tons/day compared with the beginning of the month, a decrease of 9.64%. This has eased the pressure on the supply side to some extent.

Secondly, taking the main sales area of East China as an example, in the past, the brand that has a competitive relationship with glass in Hubei Province has gone well with the recent production and sales, and the inventory is at a low level. The specifications of some enterprises are incomplete, and the average price in Hubei this week is 1186 yuan/ton, which has a obvious price advantage over the average price in East China this week of 1379 yuan/ton. According to Longzhong information, Hubei Changli, Three Gorges, Yijun, Minghong original film manufacturers recently exported to East China accounted for 15-30% of the total sales.

In addition to the boost of the increase in the volume of exports in Hubei province, and the phased delivery of goods in Hubei Province, the supply reduction in central China, the marginal improvement of some demand, and the continuous enhancement of the atmosphere of the original film enterprises, the local middle and downstream stage just need to replenish the stock for the original film enterprise shipments is indispensable. According to Longzhong Information, most of the original film enterprises in central China's provinces accounted for 30-60% of the total sales volume.

In summary, due to the shrinkage of the supply side and the boost of sentiment, the middle and downstream stages just need to replenish the stock and the period of taking goods and other multiple factors, the average daily production and sales rate of the central China market this week remained at a level of more than 100. Original film enterprises more with the market to raise prices, boost market confidence, the price increase reached a new high in the year.

However, from the perspective of the future market, the continuous upward driving force of prices is insufficient. The production line planned for cold repair in November and December is currently not available, and the production line of the early ignition has a high probability of glass production in November, and there is an expectation of a rebound in the supply side. As of October 31, 2024, the order days of glass deep processing enterprises were 12.9 days, down 2.27% from the previous quarter and 40% from the same period last year. Although the price of the original film continues to rise, the price of deep-processed finished products in many places has also risen, but the actual order has not significantly improved feedback. Only in a small part of the demand margin has improved, the market just need to support the limited case, the middle and downstream of the recent reserve of the original film inventory to be digested. With the phased reserve gradually coming to an end, there is a certain negative impact on the market.

Overall, the supply and demand in the face of the market continued to rise in the support of insufficient power, and the recent increase in social inventory is also one of the factors of the negative market. There is a lack of strong driving force for prices to continue to rise, and the probability that the market is still under pressure is large.