In 2020, China's glass price presents a "V" reverse trend. In the first half of the year, affected by the epidemic situation, the national demand is low, and the glass price continues to decline. However, after the resumption of work in April, the glass industry erupts amazing demand in the completion cycle, and the glass futures price rebounds like a roller coaster.In 2021, the world epidemic situation is in a good situation. Under the protection of high profits, the overall supply of China's glass industry will increase by 4-5% year on year. Especially in the trend of China's real estate completion recovery, the increase of commercial housing window area and the popularization rate of double-layer and three-layer glass, there is still room for further growth of glass demand. At the same time, quartz sand(silica sand washing plant) as an important raw material of glass, the price is all the way up!
1
The capacity
of float glass is expected to increase by 3.55% in 2021
From 2015 to 2020, the production capacity of
China's float glass shows a fluctuating upward trend. In 2015-2017, under the
guidance of supply side reform policy and the implementation of more stringent
environmental protection policies in some regions, China's float glass
production capacity was reduced in stages. However, since 2018, the market has
improved and new production capacity has been released. In particular, the
continuous rise of spot price in 2020 has driven the enthusiasm of production
enterprises to put in production capacity. There are 13 new production lines,
which is the year with the most production lines since 2015. By the end of
2020, China's float glass production capacity has reached the highest point of
58.7505 million tons in recent years. It is estimated that 9 new production
lines will be put into operation in 2021, with a total daily melting capacity
of 6950 tons, an increase of 3.55% over the end of 2020. From the comparison
chart of average price and production capacity data of float glass from 2015 to
2020, it is found that the correlation coefficient between them is 0.7, which
has a certain positive correlation.
 |
2015-2020 Float Glass Average Price and Capacity Comparison Chart |
In
2020, the demand of China's float glass market experienced a fluctuation from
low to high. With the resumption of production in the second quarter, the
consumer demand was greatly stimulated, and the year-on-year growth rate of
demand continued to improve. According to incomplete statistics, in the eight
months since May, the industry demand is in a positive range in seven months. In
particular, driven by the construction period in the fourth quarter, the
industry's annual cumulative demand turned positive, and the market appeared
periodic short supply. The year-on-year growth rate of demand in 2020 has been
revised, which fully shows the strong current market demand. The growth rate of
demand is expected to reach 5-7% in 2021.
 |
| Trend chart of demand growth |
2
The demand for display glass
substrate will increase in 2020
Although the demand for electronic products in
2020 is still negative compared with 2019, the demand for liquid crystal area
is becoming positive year-on-year, and the doubling of demand for glass
substrate promotes the increase of area demand. Due to the outbreak of
COVID-19, the demand for panel area was negative in the second quarter of 2020.
But according to the analysis of authoritative institutions, the demand for
equipment is strong in the third and fourth quarter of 2020. In addition, the
demand for area in 2021 is positive year on year. Data in 2021 show that the
demand for materials is quite strong.
Supply and demand model of glass substrate
Supply is expected to be tight again in the third quarter of 2021. It will take two years for the new glass substrate furnace to be put into mass production. In 2022, major glass substrate manufacturers may repair the glass substrate capacity. In 2021, there will be a continuous shortage of display glass substrates.
To sum up, the overall supply of glass will still increase in 2021. Under the circumstances of high profits and the decline of domestic environmental protection pressure, the overall annual output of glass is expected to increase by about 4-5% compared with 2020.
On
the demand side, we are still optimistic about the completion cycle brought by
high real estate construction. This year, even under the influence of the
epidemic, there are obvious signs that the completion will pick up. Next year,
under the logic of tightening the scissors and forks, we will still have strong
support for the demand for glass.
3
Photovoltaic glass industry will increase production capacity by 17200 tons in
2021
Morgan Stanley said in a report that the Ministry of industry and information technology of China has openly solicited opinions on the implementation measures for capacity replacement of cement and glass industry (Revised Draft), in which the photovoltaic glass project is not included. At the same time, according to the bank's estimation, the photovoltaic glass industry will add 17200 tons of production capacity next year. However, with the economic recovery and the carbon neutral target set by the Chinese government, the demand for photovoltaic glass will increase greatly at that time. Therefore, the supply of quartz sand is expected to remain tight in 2022. At the same time, the price of photovoltaic glass may be adjusted with the supply, bringing pressure on the gross profit margin of manufacturers.
Quartz sand, as the most used raw
material in glass production, the demand also increases. From the quotation of
quartz sand of a domestic enterprise in June 2021, we can see that the price of
quartz sand is rising continuously, and the market of quartz sand is expected
to be better in 2022.
|
Name |
Price |
|
26-120mesh Pickling quartz sand |
650 RMB/ ton |
|
26-120 mesh ordinary
washing and drying quartz sand |
350 RMB/ ton |
|
16-26 mesh ordinary quartz
sand |
610 RMB/ ton |
|
80ppm low iron quartz sand |
420 RMB/ ton |
|
26-120 mesh pickling high white quartz sand |
1000 RMB/ ton |
|
6-16 mesh ordinary quartz
sand |
230 RMB/ ton |
|
85 white 200 mesh ordinary
quartz powder |
300 RMB/ ton |
|
80 whiteness 100-150 mesh
quartz powder |
320 RMB/ ton |
|
Translucent refined quartz
sand |
1200 RMB/ ton |
|
80-100ppm 70-120 mesh
quartz sand |
650 RMB/ ton |
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