According to the Commodity Analysis System of SunSirs, the spot market price of glass rose in May. The average price of glass on May 1st was 18.65 RMB/square meter, and on May 31st it was 19.86 RMB/square meter, with a monthly price increase of 6.49%.
The spot market price of glass rose in May. In the first ten days, the overall industry production and sales situation in the market was good, and overall inventory showed a slight decline trend. In the middle of the month, some glass production lines underwent cold repairs, and in addition, from May 18th, the interest rate for personal housing provident fund loans will be lowered. Pre existing benefits for the building materials market. The price increase in the glass spot market is the main focus. In the latter half of the year, regional differentiation is more pronounced, with prices falling as the rainy season approaches in the south; The market situation in the northern region is still good, with market prices rising. As of now, the market quotation in the Shahe area is around 19.3 RMB/square meter to 20.25 RMB/square meter.
In terms of inventory, the latest publicly available data shows that as of May 30, 2024, the total inventory of float glass sample enterprises in China was 59.319 million boxes, a decrease of 301,000 boxes compared to the previous month, a decrease of 0.50%, and a year-on-year increase of 6.81%. Discount inventory days of 25.0 days, a decrease of 0.1 days from the previous period
In terms of production, according to data from the National Bureau of Statistics, the production of flat glass in April 2024 was 81.43 million weight boxes, a year-on-year increase of 3.7%. From January to April, the national production of flat glass reached 32.891 million weight boxes, a year-on-year increase of 6.5%. Under high production capacity, there is still pressure on the supply side.
In terms of caustic soda, according to the commodity analysis system of SunSirs, the overall price of caustic soda increased in May. The average market price of light soda ash at the beginning of the month was 2,030 RMB/ton, and the average market price at the end of the month was around 2,170 RMB/ton, with a price increase of 6.9%, an increase of 2.36% compared to the same period last year. Analysts from SunSirs believe that the price of light soda ash has been relatively strong recently, and the production of soda ash enterprises has decreased. In terms of downstream demand, with the recent increase in prices, more purchases have been made on demand, with moderate replenishment of inventory. However, there has not been much pressure on enterprises to ship goods in the near future. Based on the comprehensive analysis of supply and demand, it is expected that soda ash will continue to operate steadily in the later stage, depending on downstream market demand.
In terms of LNG, according to the commodity market analysis system of SunSirs, as of May 29th, the average price of LNG in China was 4,322 RMB/ton, which is lower than the average price of 4,356 RMB/ton on May 1st. The decline in domestic LNG prices this month was 0.78%. LNG analysts from SunSirs believe that domestic LNG prices have been stabilizing recently. The new round of raw material gas bidding has raised the transaction price compared to the previous period, increasing cost support. It is expected that the short-term rise in domestic LNG prices will be the main trend.
On a macro level, the National Bureau of Statistics announced that from January to April, the national real estate development investment was 3,092.8 billion RMB, a year-on-year decrease of 9.8%. From January to April, the construction area of real estate development enterprises was 6,875.44 million square meters, a year-on-year decrease of 10.8%. The newly constructed area of housing is 235.1 million square meters, a decrease of 24.6%. The completed area of houses is 188.6 million square meters, a decrease of 20.4%.
The People's Bank of China has decided to lower the interest rate of personal housing provident fund loans by 0.25 percentage points starting from May 18, 2024. The interest rates of personal housing provident fund loans for first homes under 5 years (including 5 years) and over 5 years will be adjusted to 2.35% and 2.85%, respectively. The interest rates of personal housing provident fund loans for second homes under 5 years (including 5 years) and over 5 years will be adjusted to not less than 2.775% and 3.325%, respectively. It is expected to drive the recovery of the real estate market, thereby indirectly driving the growth of glass demand.
According to the SunSirs, the spot price of glass is expected to steadily increase in May. Lowering the personal housing provident fund loan interest rate in May will be beneficial for the pre deposit of the building materials market, thereby driving demand for glass. At present, the rainy season is approaching in the southern region, and the production and sales of glass in the southern region are not good. Selling at a discounted price is acceptable, while the market in the northern region is still good. It is expected that the glass spot market will continue to operate weakly in the south and strongly in the north in the short term.
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