June 20, 2021

Glass market supply and demand imbalance, prices have fallen sharply

[China Glass Network] In recent years, the production cost of the glass industry has been increasing, the market demand has gradually declined, and glass enterprises generally have problems of overcapacity. Due to the imbalance between supply and demand in the glass market, the price of glass products has dropped significantly this year.

Increasing cost pressure

The reporter learned that the glass industry is suffering from a series of pressures caused by changes in the domestic economic situation. “As with many building materials companies with basic raw materials, although the energy consumption per unit of Jushi fiberglass products is at the global leading level, it is still a major energy consumer. In recent years, electricity and natural gas prices have been adjusted many times, and the future is also in As for the large-scale enterprises such as Jushi, every price adjustment will swallow the huge profits of the company.” Zhang Yuqiang, chairman of Jushi Group Co., Ltd. said that the various ore materials required for the company's production have also been rising in recent years.

Although the price of raw materials has increased, the price of glass products has declined. Zhou Zhiwu, deputy secretary-general of China Glass Industry Association, said that the average price of comprehensive monitoring in August was 55.94 yuan/weight box (excluding tax). Compared with the same period of last year, the weight per box decreased by 9.97 yuan, up 0.45 yuan per weight box. He said that since the beginning of this year, the price of glass has dropped sharply, which is the result of multiple pressures of high glass inventory, overcapacity and sluggish demand in the first half of the year.

High glass output

“China’s glass production is indeed much higher. Glass inventory data shows that although the operating rate is declining, stocks are still increasing, and now there is a production line equivalent to 15% of the current production capacity,” said Dai Chunping, director of China Merchants Futures Research Institute. .

Compared to excessive production, the market demand for glass is gradually decreasing. Data show that from January to July 2014, China's real estate construction area increased by 11.3% year-on-year, new construction area decreased by 12.3%, and housing completion area increased by 4.5%. “The situation in the real estate market is not good, the inventory is increasing, and the willingness to start a new job is very low. This shows that the situation has been severe this year.” Dong Wei, an associate researcher at the Urban Management Institute of the Chinese Academy of Social Sciences, believes that from the demand side, although China’s urban population growth rate is greater than the total population The growth rate and the rate of urbanization continue to increase, but the urban population growth rate is already in the downward channel. The long-term driving force to support the long-term rapid growth of housing prices and the long-term substantial increase in real estate sales area does not exist.

In order to achieve the balance of supply and demand in the glass industry, in recent years, the National Development and Reform Commission, the Ministry of Industry and Information Technology and other joint publications, resolutely eliminate backward production capacity, the relevant industry associations also vigorously called for control of production capacity, and set new industry access standards, received positive results. "Although the government is supervising and guiding, many industries still inevitably have a serious overcapacity. China's glass fiber industry is no exception. The results of the total control of the glass fiber industry are hard to come by. It is hoped that not only big companies will take the lead in sacrificing themselves. The total amount of government, industry associations should strictly control the approval of new projects." Zhang Yuqiang said.

In addition, industry insiders said that for the disorderly development of backward production capacity, counterfeit and shoddy glass products, it is necessary to further strengthen joint efforts and investigations by the state, local governments and industry associations to ensure the orderly development of the glass industry.

Transformation and upgrading lack international talents

In order to digest excess capacity, some glass companies began to implement the “going out” strategy to achieve transformation and upgrading. According to Zhang Qiangqiang, in the process of eliminating overcapacity in the giant stone enterprise and truly achieving internationalization, it is found that the development of the company is constrained and the “going out” of enterprises is the lack of high-end international talents. In the cross-cutting policy of "stone, innovation, responsibility, learning, passion" of Jushi's corporate culture, it can be said that all are requirements for people. “What is international talent? Our requirement is to meet the requirements of the Jushi cross culture, and to have a world-class knowledge structure, professional skills, vision and ability. The people who can serve the “going out” and “internationalization” of Jushi are international. Talent," Zhang said.

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