The glass market has set off a new round of price increases! Is it a routine or is there another reason?

A new round of price increases in the glass market is coming.

On May 28, Hubei Minghong Glass, China Glass Holding Weihai Base, China Glass Holding Suqian Base, Hunan Juqiang Glass Factory Sales Department, Wujiang Nanglass Glass Co., Ltd. and many other glass production and processing enterprises issued price increase letters.

A number of companies have stated in the price increase letter that due to the recent increase in the cost of raw materials, the company has decided to raise the price of glass from June 1.

The person in charge of a glass dealer told reporters that this is the marketing routine of glass companies. "The price increase is implemented from June 1, which means that there will be no price increase from now until June 1, and you should hurry up and buy goods. Whether the price really rises depends on the production and sales situation in the days before June 1. Now the glass factory inventory is very high, and the short-term price increase is also tentative, and I think there is a possibility of a significant price increase after June 15. ”

Zhang Li, a senior researcher at Yide Futures Glass, told reporters that last week, many regions reported that glass prices were close to the cost line, and enterprises were willing to reduce prices, but since the end of last week, due to high inventory pressure, prices in many regions have fallen again. After the glass price fell sharply in the first half of this week, the price in Hubei fell to 1,800 yuan/ton, and the glass price in Shahe fell to 1,750-1,770 yuan/ton and began to stabilize. The sharp drop in glass prices in the past two weeks has not brought about a good production and sales, and the inventory increase is still obvious.

"Starting from the end of this week, many enterprises in South China and East China have successively issued notices of 40 yuan/ton of price increases after June 1, and yesterday the price of glass in Shahe area was still reduced by 20-40 yuan/ton, and the price trend of the north and south was differentiated. Zhang Li said that the current round of glass enterprise price increase is more because of the cost pressure of enterprises, East China and South China natural gas fuel accounted for a large proportion, and the price of natural gas in these two places is higher, before the price increase, the spot price of glass in 1980-2000 yuan / ton, in the current natural gas price of 4 yuan / cubic meter and soda ash 3000 yuan / ton, the complete cost of gas production is around 2000 yuan / ton, enterprises on the edge of profit and loss.

"Recently, the price of industrial natural gas has risen, and the cost of glass has moved up. Wei Chaoming, a senior analyst at Founder medium-term futures, said that the market price of industrial gas in Handan, Hebei Province, for example, climbed from 2.99 yuan/cubic meter at the beginning of the year to 4.36 yuan/cubic meter at present, an increase of 45.8%, not considering the cost of raw materials such as heavy alkali, only the cost of fuel, pushing up the cost of glass production by about 300 yuan/ton.

Wei Chaoming said that with the improvement of the epidemic prevention and control situation across the country and the orderly release of real estate completion demand, the high inventory situation of glass is expected to ease, giving glass companies the confidence to raise prices to cover production costs. "Generally speaking, glass manufacturers will raise prices in advance to achieve the effect of promoting sales and effectively reducing inventory, such as this round of price increases will be implemented on June 1. In addition, the increase will also depend on the actual sales status of the reserved time window. ”

Zhang Li said that the increase in glass prices in East China and South China is mainly based on cost pressure, not the reason for the improvement of supply and demand. June to July is the rainy season, itself is the off-season for consumption, short-term demand is difficult to improve significantly, and the end of April and the end of May put into production will be successively introduced, the supply pressure is not reduced but increased, the price suppression is still obvious.

From the perspective of futures, Zhang Li said that the 9-1 spread continued to widen, and the premium of 2301 contracts was 2209 contracts, reflecting that the market's expectations for near-month contracts are still poor. "Recently, the market has increased sharply, but the price has been oscillating around 1750 yuan/ton, and the long-short game has intensified, which is more conducive to short positions and months from a structural point of view. In the long run, the weak supply and demand of glass is difficult to change, more of a low valuation, the sentiment of the policy is pulled, and the price rebound brought about by the downstream phased replenishment, and the price bottom may still be difficult to appear in the second half of this year. ”

"Affected by many unfavorable factors, the glass accumulation cycle since the fourth quarter of last year has continued to this day, and the current inventory is close to the historical high reached in 2020. Under the pressure of high inventory, glass experienced an off-season market that exceeded expectations. Rising costs and low prices have led to low profits or losses in glass production. Wei Chaoming said that with the improvement of the capital of real estate enterprises and the recovery of glass deep processing orders, the glass market is still worth looking forward to.

Transferred from: Futures Daily