Looking at the development status of the glass industry, we can express it with "stable progress, steady and good, better and better". In the medium and long term, the overall change in the growth rate of supply demand will tend to be stable, the probability of supply downward will be large, and the gap between supply and demand is expected to gradually converge. The demand for glass mainly comes from the three major fields of real estate, automobile and electronics. Among them, real estate accounts for a large proportion, accounting for 70%-80%, which is the main factor affecting glass demand.
The production cost of glass mainly concentrates on soda ash and fuel. With the elastic expansion of soda ash price, soda ash has become an important factor affecting glass profit. In the downstream demand for soda ash, 50% concentrates on the float glass industry. The national soda ash price center has been maintaining a narrow range of fluctuations of 1,600 yuan/ton from 2012 to 2017, but since the second half of 2018, the overall fluctuation center has suddenly increased to around 2,000 yuan/ton. The 2018 soda ash price elasticity is amplified by the rapid increase in soda ash capacity utilization. Soda ash has been limited in new capacity in the chemical industry, but the glass industry's production capacity has grown moderately since the recovery of profits in 2018.
Considering that the period of rapid supply expansion and rapid growth of demand has passed, the supply and demand gaps have gradually converge on the trajectory, policies such as strict control of production capacity and strict control of environmental protection have continued, and factors such as the strengthening of self-discipline in the industry have become the adjustment of supply and demand in short-term industries or local areas. The key element of the difference. The glass industry overview and current situation analysis, it is expected that the price amplitude will also converge at this stage, corporate performance will be affected by price fluctuations, business operation efficiency, cost control and other issues will become the key to competition.
According to the Ministry of Environmental Protection's "Announcement on the Implementation of Special Emission Limits for Air Pollutants in Beijing-Tianjin-Hebei and Surrounding Areas (Draft for Comment)" and "2+26" Urban Flat Glass Special Emission Limit Meeting, from June 1, 2018 The “2+26” urban flat glass industry will implement new air pollutant special emission limit requirements. The trial of new environmental protection standards shows that the country's environmental protection efforts are constantly increasing. From the recent shutdown of Shahe District, the implementation of current environmental protection policies is more stringent than before, and officially marks the glass industry's entry into the “supply side to capacity”. Sustained, the impact on glass companies will gradually emerge.