The third regional market coordination meeting in East China and North China was held on July 11th. The 26 manufacturers participating in the conference accounted for 48% of the national production capacity. All manufacturers agree that the traditional sales season has arrived, and the total inventory of manufacturers is not much. In addition, the cost of raw materials has risen sharply, and the cost of digestion is a necessary choice. The meeting decided that since the 12th, the manufacturers have increased their prices according to their own circumstances. After the meeting, some manufacturers in Beijing, Tianjin and Hebei and Shandong and other regions released news, the price rose by about 20 yuan, while most other manufacturers temporarily wait and see.
In the context of stable demand (slightly increased) and limited supply, as a part of the recent price hikes of various raw materials, the rise in glass prices is also sustainable, and the corresponding A-share related sectors will also Benefit from this wave of rise, and show the driving force.
Earlier, the South China industry conference enterprises reached a common pull-up consensus (it is reported that the relevant conferences suggest that the factories will rise every Monday until the full digestive cost increases), and most enterprises in Guangdong, Fujian and Hainan report an increase of 1 yuan/weight box, and the market price increases. The atmosphere is strong.
The East China North China Glass Coordination Meeting has once again reached a consensus on price increases. It can be expected that in the current peak season, the possibility of continuing the price of the regional conferences is still relatively large.
As the peak season is expected to exist, the mid-stream traders have a tendency to replenish the stocks, and the industry stocks are falling back, providing confidence in the spot prices. In the short term, there are no new negative factors in the market, and glass prices are expected to be stable and strong.
From the perspective of downstream demand
1. Although the proportion of monetization shed reform is reduced, the shed reform is expected to be more advanced by physical resettlement. However, by 2020, the total amount of shed reform will be limited, and the direct impact on glass demand will be relatively small; the demand for flat glass will lag behind the new construction of real estate. 4-6 quarters, therefore, glass demand is expected to be relatively stable.
2. The trend of increasing the price of bicycle glass is still there, and the potential growth space is relatively large. It is estimated that by 2020, the domestic auto glass market will reach 27.7 billion yuan. The increasing trend of the use of bicycle glass area is more obvious, mainly due to the increasing proportion of sunroof applications. SUV sales in the Chinese market maintained a relatively high growth rate (the average bicycle glass area continued to increase by 2-3 points per year), while the SUV's skylight configuration rate was relatively high, which led to an increase in the use of bicycle glass area; The sunroof configuration rate of the car is also gradually increasing, and the larger panoramic sunroof is gradually put into use. In this context, the price of automotive glass per unit area continues to increase.
3. In recent years, electronic glass and display devices have continued to grow, and it is expected to become a new profit growth point for the industry.
From the supply side, factors such as stricter environmental protection and cold repair put pressure on supply. According to estimates, glass supply is expected to reduce by 7964 tons/day in 2018, and the gap between supply and demand will reach 28.43 million weight boxes, and glass prices are expected to remain stable.
In general, demand is stable (slightly increased), supply is limited, and the trend of industry price increases will continue. The relevant sectors of the glass industry and related industrial chains (such as soda ash) will show the driving force.