Analysis of Market Price of Western Float Glass in the Second Half of 2010

It is reported that monthly cement output in May reached a record high, breaking 1.7 trillion tons, an increase of 18%; flat glass production of 53.9 million weight boxes, also an increase of 18%, the demand is in rapid growth since the second half of last year. We believe that with the gradual increase in the base value in the second half of the year, the demand growth of the building materials industry will gradually slow down, and the demand growth of the building materials industry will be mainly stable in the next two years.

The downward trend in prices: Although the demand remains strong, the effect of the industry's crazy investment last year gradually emerged this year. In early June, the cement prices in the southwest and northwest regions where supply pressure was relatively high fell compared to the same period of last year, and only the south and east China where cement pressure was relatively low. Regional prices rose year-on-year, and all regions remained basically flat. Due to the large increase in the cost of raw materials such as coal, the profitability of the cement industry is expected to decline. In May, almost all cities in float glass prices rose year-on-year, and in May, they also rebounded in May, but this did not change the downward trend of float glass prices this year. As soda ash, especially heavy oil, has risen sharply, the profit margin of the glass industry is also expected to gradually decline.

Building materials market "cold" float glass market is worrying

Industry investment continued to maintain rapid growth: In May, cement investment reached 20.2 billion yuan, a year-on-year increase of 28%. In the first five months, cement investment totaled 63 billion yuan, a year-on-year increase of 25%. Investment in the northwest and north China regions both doubled year-on-year, and it is expected that supply pressure will be greater in these two regions next year. In May, there were 2 float glass production lines put into production. From the second half of last year to May this year, a total of 20 float glass production lines were newly put into production in various regions, adding an annual melting capacity of 11,800 tons. At the same time, production lines are currently discontinued and cold-repaired. The daily melting capacity reached 15,000 tons, and it is expected that the supply pressure will be greater in the future. We still insist that "the elimination of backward production capacity can not rely on administrative means but rely on the market survival of the fittest."