bestgameplaytoearncrypto| Comparison of regional float glass market operation-North China and East China

(Zhuochuang Information analyst Cui Yuping)

[introduction] in April, the overall performance of the northern market was OK, the prices of the north and south were gradually upside down, and the price center of gravity in North China, the main producing area, was significantly higher than that in the central China market. In May, the northern market still maintained a certain trend of going to the warehouse, Shahe inventory further fell to a lower level, coupled with the cold repair of some production lines, the supply pressure has been reduced. Supported by this, the price of East China is supported to a certain extent, which is smaller than that of North China.

Market priceBestgameplaytoearncryptoThe supply pressure in the north has eased, and the price gap between North and East China has narrowed.

Zhuochuang information data monitoring shows that in April, the average price of float glass in North China was 1569.Bestgameplaytoearncrypto.86 yuan per ton, down 7% from the average price in MarchBestgameplaytoearncrypto.35%, down 10.20% from the same period last year. The high point of the month appeared on April 11, with an average price of 1595.30 yuan per ton, and the low appeared at the end of April, with an average price of 1558.30 yuan per ton, which was basically the same as at the end of March. The average price in East China remained at 1797.6 yuan per ton in April, and the low also appeared at the end of the month. 13.51% lower than the average price in March, the decline increased by more than 11 percentage points.

In May, with the expected cold repair of some production lines in Shijiazhuang after May Day and the support of replenishment in the middle and lower reaches, the transaction improved, the price of white glass in some factories in Shahe and Shijiazhuang rose slightly by about 1 yuan per weight box, and the inventory of float plants was effectively reduced. Some factories in Beijing-Tianjin-Tangshan region have raised 1 yuan per weight box, while others are basically stable. On the whole, although the recent shipment increment in North China is obvious, and most of the inventory is not under pressure, taking into account other regional prices and downstream order factors, the price adjustment is more cautious.

Looking back at the overall operation of the East China market, most of the original manufacturers had an obvious intention to stabilize prices in May, according to the large volume over the years.BestgameplaytoearncryptoAlthough the low inventory level in North China supports a small increase in individual factories during the month, under the influence of the current inter-regional price difference and the limited release of downstream demand, although the prices of individual factories in East China have risen slightly, but the implementation is general, some of them are still slightly loose in the middle of the month, showing a small shock operation as a whole.

Cost and gross margin: the cost trend is higher and the regional gross margin margin is narrowing.

Affected by the air pollution control policy, the fuel in North China market has been adjusted to a certain extent in recent years. According to Zhuochuang information statistics, up to now, float glass fuel in North China is mainly coal-to-gas and pipeline gas. Shahe, the main producing area, currently accounts for basically 1:1 of the two production capacity, while the East China market takes natural gas as the main fuel, accounting for nearly 62%. In recent years, supported by cost pressure, prices in East China have been adjusted by all shocks. However, the overall price level is higher than that in North China, and a large part of Shahe's supply depends on outward supply in recent years, and the profitability of pipeline gas float glass industry is relatively low, so under the background of air pollution control and double carbon, capacity growth in Shahe area is greatly limited.

Comparing the gross profit level of the same fuel product in the two regions, it can be seen that with the loosening of the original price, the profit margin of natural gas glass in North China and East China is gradually narrowing, among which the gross profit of natural gas in North China market is even thinner. The following figure shows that the profit gap has gradually narrowed in the past two years, and so far, the inter-regional profit gap is about 100 yuan / ton. In the later stage, according to the rhythm of spot price adjustment, the cost is likely to be in a narrow range, and the gross margin of the industry will be mainly driven by changes in glass prices.

Supply: the difference between the north and the south is widening, and the pressure in North China is obviously less than that in East China.

Zhuochuang information monitoring data show that so far, the daily melting capacity of float glass in North China is 35730 tons, a decrease of 1000 tons or 2.72 percent over the same period last year. During the month, the second and third lines of Yujing in Shijiazhuang totaled 1400 tons and stopped production on May 10, and the new second line of 1000 tons was ignited on May 12.

At present, the operation of the market is relatively stable, with a total of 2700 tons of cold repair or suspension of production expected to be postponed in Shahe area. it is expected that the production capacity will be stable from May to June, and the production capacity will be slightly reduced in the second half of the year. Compared with the same period last year, production capacity in North China from May to December is expected to decline slightly compared with 2023. From a national point of view, the supply pressure of production capacity in the north is significantly smaller than that in the south, especially in South China, and it is expected that the price gap between the north and the south may be further reduced in the later period. However, the overall domestic supply is still sufficient, the status of outward dependence in North China is difficult to change, and the price gap between North China and East and Central China is difficult to change significantly.

During the month, the production capacity of the East China market was relatively stable. As of late May, the daily melting capacity of East China float glass enterprises had maintained 34755 tons, basically unchanged from the previous month, down 0.95% from the same period last year. Recently, there is no capacity for cold repair, and the production capacity has reached a high level in recent years. From June to July, only individual production lines in Zhejiang Province have cold repair plans, and the total supply of White Glass has shrunk slightly, but the current product structure in East China market is more diversified. Under a certain price difference between the current price of construction glass and the supply of goods in the North China market, it is still difficult to change the inflow trend of foreign sources.

In terms of inventory level, from April to May, there were certain reductions in factory depots in North and East China, especially in Hebei, where inventory reduction was obvious and operators were at peace. According to the monitoring data of Zhuochuang Information, as of May 15, the average inventory days of sample production enterprises in Hebei, Shahe, and traders were 9 days, 4.5 days and 12 days respectively, and the inventory of enterprises was significantly lower than the industry average. The inventory pressure of some large factories in the eastern China market is relatively high, and the inventory pressure of most of the other factories is OK. Among them, 20% of the rest of the enterprises are digested for their own use. As of May 15, the inventory of the sample enterprises in East China has dropped by an average of 0.52% in a month, which is relatively high compared with the same period last year, and the inventory pressure of the major major manufacturers is obvious. In addition, Shahe traders in North China have also digested the inventory to a certain extent. Up to now, Shahe traders have maintained their goods near 40% of their positions, with a relatively calm state of mind and stable price shipments.

Forecast: demand may be expected to recover, but strength is still limited

The demand in the north has recovered somewhat from April to May, but the strength is limited, the engineering glass factory as a whole is still in a state of lack of order, and the starting load remains on the low side. Fierce competition in the industry, engineering glass factory small profit and quick turnover strategy, small profit or no profit operation. Affected by this, low-e board shipments are not good, April-May prices have gradually declined. In the later stage, we should pay attention to the pull of real estate policy on the demand side.

Overall, by mid-May, the inventories of Shahe enterprises had dropped to a relatively low level, and the inventories in the northern region were significantly lower than those in the southern region. Under this support, prices in North China were relatively firm from April to May, with a higher price center than in Central China. The linkage impact with the East China market is mainly reflected in price changes. In the later period, price adjustments in North China have become more cautious. On the one hand, there is certain support for the short-term market price rise; on the other hand, the supply and demand structure is better than that of the southern market. As the source of goods from the north, the main flow of goods from the north flows into the East China market. Prices may be expected to adjust slightly to control certain regional price differences, but mainstream market prices are temporarily stable.