As the upstream of construction and automobiles, the price and demand of the glass industry have risen in the first half of this year. With the recovery of the domestic economy, the price of float glass hit a record high, stimulated by rising raw materials and strong demand. As of June this year, float glass rose 86.87% year-on-year.
On August 6, the semi-annual report released by Fuyao Glass, a leading automotive glass company, showed that in the first half of this year, the company achieved operating income of 11.54 billion yuan and net profit of 1.77 billion yuan, an increase of 42.14% and 83.54% respectively. Among them, The operating income of float glass products increased by 50.16%, operating costs increased by 35.38%, and gross profit margin increased by 6.27%.
“Since the beginning of this year, soda ash, the main raw material of float glass, has increased significantly, with an increase of 70%-80% compared to the beginning of last year.” Insiders told the Securities Daily that the price increase of upstream raw materials was transmitted to glass companies.
However, in response to the increase in the price of glass futures this year, Fuyao Glass stated in response to investor inquiries that the company’s float glass is mainly supplied to the company’s automotive glass, that is, domestic supply is the mainstay, and it has not participated in glass futures. In contrast, other companies in the middle and lower reaches of the glass may not be so lucky.
Data shows that in the first half of 2021, the price of float glass reached the highest level of 2,835 yuan/ton. After entering July, the price of float glass continued to rise. At the same time, inventories are still at a low level. According to the Glass Industry Network, on July 30, the inventory of glass companies recorded 17,251,200 heavy boxes, a decrease of 971,000 heavy boxes from the previous week; in the last month, the glass company’s inventory decreased by 3,740,400 heavy boxes, a decrease of 17.82%.
“Affected by low inventory, the market’s wait-and-see sentiment is still heavy.” An industry insider said.
Data shows that as of the end of June 2021, domestic float glass production capacity was 58.1205 million tons. In the second half of 2021, it is planned to add 7 domestic float glass production lines, involving a daily melting capacity of 6,000 tons.
As for industry trends, industry insiders believe that 70% of float glass is still used in the construction industry. According to the plan, real estate demand in the second half of 2021 will still be in a major cycle. It is expected that domestic float glass will continue to show an upward trend in the second half of 2021, but the magnitude is smaller than that of the first half of 2021.
