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Glass market status, let's take a look!
From：CHANGZHOU ZHONGBO GLASS MACHINE AND EQUIPMENT CO.,LTD Date：2019-3-25 14:10:09
The glass industry belongs to the pure midstream processing manufacturing industry. With the gradual increase in the proportion of construction projects and land acquisition in real estate development investment, the revenue of glass industry in China has maintained a steady growth. By the first half of 2018, the gross profit rate of glass industry was 25.93%. The following is an analysis of the current situation of the glass market.
Some analysis parts of the glass industry are similar to the cement industry. Float glass capacity expansion has gradually stabilized. The growth rate of industry supply has declined rapidly since 2014 and reached a historical low of 3.16% in 2016. It is expected that the growth rate will continue to decline. The glass market analysis shows that the overall change of supply and demand growth rate will be stable, the probability of supply downward is large, and the gap between supply and demand is expected to converge gradually.
From the downstream demand, real estate is the main application area of glass, accounting for about 75% of the total demand, mainly used in doors and windows, curtain walls, furniture and other decorative goods, followed by the automotive sector and exports, accounting for about 10% and 5% respectively. Glass market status analysis, as glass and real estate industry is highly relevant, so glass sales and real estate cycle.
From the perspective of profitability, supply contraction continues the boom cycle of the industry, and the industry glass-soda price gap returns to fluctuation near the stage high in 2013 under the stricter environmental protection. Compared with the cumulative capacity of cold repair and resumption from 2012 to now, it is still possible that the capacity that has not been resumed under the continuation of the industry boom will be put into operation. Considering the continuity of glass production process, the resumption of potential resumption of production line will undoubtedly be a disadvantageous factor for the industry supply.
In 2017, China's glass industry revenue grew at 17.61% (20.03% in the same period in 16 years) and net returns to its mother at 17.04% (76.15% in the same period in 16 years). Both growth rates declined year-on-year, mainly due to the low base of 2016H1. It is expected that the glass industry revenue will continue to grow steadily in 2018 and net returns to its mother will differentiate.
From 2018, the glass industry will enter a longer peak period of cold repair. The cost of cold repair in the glass industry is very high, mainly because refractories need to be replaced in large quantities, the fuel cost of the kiln and the time cost of cold repair, generally between 40 million and 60 million. With the price increase of refractories, the cost of re-production is also rising.
From January to May, the new construction area increased by 10.76% and 2.02% year-on-year, 3.42 percentage points and 0.44 percentage points higher than the cumulative growth rate from January to April. Regional differentiation is more serious. From January to April, the new housing construction area in eastern, central and southern China and southwestern China increased by 14.2%, 9.06% and 10.73% year-on-year, while in North China, Northeast China and Northwest China, it declined by 10.53%, 3.11% and 27.34% respectively. From the perspective of housing construction area, the eastern and central and southern China increased by 2.76% and 7.37% year-on-year, while in the rest of the region, it declined considerably. According to the current situation of glass market, the future demand support in East and South China is stronger than that in other regions.
The demand for glass downstream mainly comes from real estate, automobiles and other fields, realty accounts for 80-85%. From the perspective of the real estate industry chain, glass demand comes from the decoration link after the completion of the real estate, and the power comes from the investment and construction driven by the real estate sales. In 2018M1-5, the total sales area of commercial housing in China rose to 2.9% year-on-year. From the sales of current housing in the period of 1-4 months, there was a huge difference between the growth rate of sales area of future housing and existing housing, and the proportion of future housing expanded to an all-time high of 81%.
Generally speaking, the pace of glass supply side reform has been accelerated, backward and staggered peak production has been eliminated, and supply contraction has been accelerated. China will maintain a strong growth trend in the global glass fiber market throughout the forecast period. In the future, as long as the glass price rises, the cold repair quantity will decrease, and once the glass price falls, the cold repair quantity will increase.