Is glass rebounding or reversing?



Has there been a significant fluctuation in glass recently, and have there been any changes in the fundamentals? Has the market's expectations for glass changed?



Core viewpoint: Since last Friday, glass production and sales have improved, showing a trend of not being weak in the off-season, mainly due to market expectations that the real estate industry will introduce more stimulating policies in the future. From the perspective of glass demand, the demand for glass during the traditional off-season is relatively average. Except for the eastern and southern regions of China, the progress of ensuring the delivery of buildings in other regions is slow. We need to focus on changes in the demand side in the future，Glass product  .

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The Caixin PMI value announced last Thursday was 50.9, a 1.4% increase from April. This has driven bullish sentiment, which is different from the data released by the Bureau of Statistics on Wednesday. The Caixin PMI data samples are mostly small and medium-sized enterprises, while the official PMI is mostly large enterprises. This has alleviated the pessimistic sentiment in the market in recent times and indirectly reflects the improvement of the economy.



The entire commodity market rebounded on Thursday. Last Friday, glass changed its previous decline and saw a significant increase, with the main contract FG2309 experiencing a limit up and several contracts also experiencing limit up.



Glass 2309 contract daily line



Since May, glass production and sales have started to weaken, due to the significant increase in spot prices in April. Downstream customers, with a certain amount of raw material inventory, are relatively resistant to the significant increase in glass prices. This has caused a decline in production and sales, and futures prices have fallen below the starting point. (The decrease in raw material prices has led to a shift in cost center) Last Wednesday, the glass 09 contract hit a new low in nearly six months. Has the fundamental fundamentals of glass changed in just two days?



Last Friday, the limit increase of multiple contracts for glass futures was mainly affected by the stimulus policy of real estate, as well as some unfounded "small essays". The market is expected to have further policies introduced. Not only glass futures, but also the decoration and building materials sector of A-shares has seen a significant increase, with multiple stocks experiencing limit up. From the entire weekend, there was no relevant news.



From the spot production and sales of glass, the production and sales in Hubei were relatively weak in the first four days of last week. The production and sales in Shahe were better than those in Hubei, but not over a hundred. The production and sales in East and Southwest China were better than those in Hubei and weaker than those in Shahe. Starting from last Friday, Shahe experienced a booming market, with production and sales reaching 188%. Over the weekend, production and sales reached 231% and 179%, respectively. Compared to Hubei, East China and other places, there has been improvement, but it is far behind Shahe.



From the distribution of manufacturers, the distribution of glass manufacturers in Shahe is relatively concentrated, with strong market speculation, while other provinces such as Hubei are more dispersed, with less frequent price fluctuations.



From the downstream of the original glass sheet, as of the end of the month, the number of days for deep processing orders was 15.7 days, a decrease of 0.7 days compared to the previous period. From the perspective of the real estate sector, there has been a cliff like decline in the construction area since the second half of 2021 compared to the same period last year, reflecting a decline in the demand for engineering glass such as hollow, tempered, and laminated glass.



In our glass soda ash review on April 19th, the teacher mentioned that the market in April was mainly due to the relatively good increase in non-standard glass for home decoration