I. Short-Term Focus: Plum Rains Suppress End-User Demand; Circulating Inventories Pile Up

Widespread and persistent "plum rain" weather across the middle and lower reaches of the Yangtze River has kept humidity levels high for an extended period. Finished float glass is highly susceptible to mold, causing downstream deep-processing plants—wary of potential losses—to avoid bulk stockpiling and limit purchases to bare-minimum operational needs. Construction activities related to outdoor windows and doors, curtain walls, civil engineering, and real estate have nearly stalled, leading to a sharp contraction in the volume of end-user orders.

Industry data indicates that deep-processing enterprises nationwide currently hold only eight days' worth of orders—a five-year low for this period. With both upstream and downstream sectors actively reducing inventories, the buffer stock in circulation has vanished; factory shipment paces have slowed, and the overall production-to-sales ratio has consistently remained below 90%.

Inventory pressure is acute. As of early July, total inventory across sampled float glass enterprises stood at 76.059 million heavy cases, with turnover days exceeding 34—a year-on-year increase of over 10%. Regional disparities are evident: plants in Central China continue to see inventory accumulation, while spot prices keep falling. The market faces a dilemma: steep price cuts would exacerbate production losses, yet maintaining prices leads to inventory saturation. Consequently, most producers offer only minor concessions to secure sporadic shipments, while a "wait-and-see" sentiment prevails across the market.

II. Deep-Seated Industry Conflict: Long-Term Real Estate Weakness; Supply Contraction Lags Behind Demand Decline

While the plum rain season represents a temporary, short-term disruption, the persistent weakness in real estate completions is the fundamental bearish factor for the glass industry this year. Float glass furnaces operate on long, continuous production cycles, and the costs associated with shutdowns or cold repairs are prohibitively high. Even amidst industry-wide losses, most production lines are forced to maintain continuous, low-load operations, meaning the pace of supply-side contraction lags far behind the rate of decline in demand.

Profitability shows a stratified pattern: producers with integrated quartz sand supplies and captive gas sources face relatively manageable losses, whereas small- and medium-sized lines heavily reliant on purchased coal and fuel gas suffer continuous cash flow depletion and more severe pressure from losses. The industry's cycle of losses has extended; after a slight loss in the first quarter, losses widened in the second quarter as real estate data fell short of expectations. July saw a convergence of the rainy season with inventory, loss, and demand pressures, marking the start of a weak cycle characterized by both prolonged duration and significant magnitude—the most severe in nearly a decade.

On the supply side, although over twenty production lines underwent scheduled cold repairs in the first half of the year, the market had already priced in this maintenance, so no supply contraction exceeding expectations occurred. Following a brief period of downstream restocking in April, inventories rebounded, and the fundamental imbalance between supply and demand saw no substantive improvement. Upstream soda ash prices remained weak, offering no cost-side support, and the spot market lacked catalysts for a significant upturn.

III. Key Theme of Passive Adjustment: Losses Force Accelerated Cold Repairs for High-Cost Kilns

Amidst persistent losses, the voluntary cold repair of outdated kilns has become the industry's only short-term adjustment mechanism. Continued production results in a fixed loss per unit of finished product, constantly draining corporate liquidity; consequently, there is a clear trend toward phasing out old, high-energy-consumption production lines.

There is a distinct divergence in how cold repairs are implemented: small production lines with weak capital bases and long service lives are likely to accelerate their cold repair schedules. Conversely, large integrated bases—even if they shut down certain lines—retain the potential to restart production in the future under capacity replacement policies, meaning long-term supply pressure cannot be fully cleared in a single stroke.

Regional supply variables are concentrated in Central China, where plans are underway to convert multiple petroleum coke-fueled lines to natural gas or electric power. While these conversions would temporarily reduce the volume of goods circulating in the region, the lack of a clear timeline for the conversion process means no immediate, substantive market benefit is likely.

Cold repairs also face practical constraints: the capital investment required to overhaul a single kiln is massive, and restarting production post-overhaul means facing fierce market competition. Most producers face a dilemma: continuing production leads to a constant financial drain, while halting production entails high conversion costs. Consequently, the overall pace of capacity clearance in the market remains sluggish.

IV. SunSirs Industry Chain Benchmark Prices (July 9)

Upstream Raw Material: Soda Ash

On July 9, the SunSirs composite benchmark price was 1,112 RMB/ton, down from 1,126 RMB/ton on July 1. Prices weakened on both a daily and monthly basis; sluggish demand for glass suppressed soda ash procurement volumes, and there was no upward cost support.

Downstream Deep-Processed Products

Prices for standard window/door and curtain wall glass fell in tandem. In contrast, high-end Low-E energy-saving glass and photovoltaic (PV) glass showed greater price resilience; steady demand from green building and PV sectors created a significant market divergence compared to standard flat glass used in real estate.

V. Price Transmission Logic Across the Supply Chain

Upstream Transmission: Demand for raw materials like soda ash and quartz sand weakened alongside reduced glass production, causing raw material prices to edge down. However, the limited decline in raw material costs failed to fully offset losses from falling finished glass prices, rendering cost support ineffective.

Flat Glass to Downstream Transmission: Prices for clear float glass continued to drop. However, constrained by insufficient orders during the "Plum Rain" season, deep-processing enterprises hesitated to increase inventory, opting instead for small, on-demand purchases. Lower raw material costs failed to trigger concentrated downstream restocking, perpetuating a negative feedback loop.

Product Category Divergence: Supply and demand for standard clear glass (used in real estate) remained loose and prices continued to weaken. Conversely, downstream demand for specialty glass (used in PV and green buildings) was underpinned by rigid policy support; supply and demand remained tightly balanced with firm prices, causing the price gap within the industry chain to widen.

VI. Comparison of Domestic and Overseas Demand Patterns

Domestic demand relies entirely on three traditional sectors: real estate completions, home renovation windows/doors, and infrastructure support; the industry is currently weak overall. Overseas demand for PV and energy-saving building materials remains stable. While export channels for certain deep-processed products can absorb some domestic excess flat glass, export volumes are limited and cannot fundamentally reverse the loose domestic supply-demand balance.

There is no large-scale addition of overseas float glass capacity, and import demand focuses on high-end specialty glass; standard architectural clear glass lacks export competitiveness. Consequently, overseas markets serve only as a marginal buffer rather than a core driver of market trends. VII. Forecast of Phased Market Trends

The "Plum Rains" will continue to dampen downstream construction activity and procurement sentiment; with inventories remaining high and losses persisting, spot glass prices are expected to fluctuate within a weak range. While traders may engage in periodic restocking once the rainy season ends, this would likely trigger only a brief, modest market recovery rather than a fundamental trend reversal. Even with the traditional "Golden September and Silver October" peak season approaching, market sentiment remains cautious; given the lackluster recovery observed during the first half of the year's peak season, it is inadvisable to be overly bullish on the seasonal outlook.

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