Float Glass Market Face Challenges

Recently, the float glass market has faced the challenge of weak supply and demand, and both output and demand have shown a downward trend. Last week, the national daily output fell by 0.34% month-on-month, and this week's output fell by 0.19% month-on-month. After the Tomb Sweeping Day, downstream replenishment operations occurred in some areas, but demand was still weak. In terms of inventory, production and sales improved month-on-month, and the total inventory of sample companies decreased by 2.61% month-on-month. However, there has been a contraction in profits and downward pressure on spot prices. Market expectations are weak. Although the inventory structure supports prices, the downward trend in prices may continue after the inventory replenishment is completed. It is recommended to pay attention to the sustainability and risk factors of replenishment.

From the supply side, as spot profits decline, production resumption slows down and the number of cold repairs increases. Last week, the No. 4 production line of the "Safety Glass Factory" released cooling water and carried out cold repairs on the kiln. The daily output of float glass nationwide decreased slightly, reaching 175,900 tons, a month-on-month decrease of 0.34%. This week's output was 1.2328 million tons, a month-on-month decrease of 0.19% and a year-on-year increase of 10.67%.

In terms of demand, after the Tomb Sweeping Day, there was replenishment in some areas downstream. The order days of downstream deep processing plants dropped slightly, and demand before the holiday weakened month-on-month. However, seasonal analysis suggests demand is expected to pick up after the holidays. The inventory days of deep-processed raw films decreased significantly year-on-year, indicating lower downstream inventory levels. When demand picks up, there will be demand for replenishment downstream.

In terms of inventory, production and sales have improved month-on-month, and inventory has begun to be reduced. The total inventory of float glass sample companies across the country decreased by 2.61% month-on-month and increased 4.9% year-on-year. Inventory days fell slightly.

In terms of profits, the average weekly profit of float glass fell. Spot prices are falling and profits are expected to shrink further.