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Brief Analysis of the Development Status of China's Glass Industry
As the country pays high attention to energy conservation, emission reduction and overcapacity in the glass industry, the market is paying increasing attention to this product. At present, most investors and business personnel have little knowledge of the glass industry. Based on recent visits and research and in-depth follow-up studies, a brief analysis of the current state of development of the glass industry will give us a better understanding of the industry. The
Distribution characteristics of the industry China's glass companies are mainly located in Liaoning, Hebei, Shandong, Jiangsu, Zhejiang, Guangdong, and Fujian, and now in Inner Mongolia and Northwest China also have some production lines in the central and eastern regions.
The fragile nature of glass and the limitations of its transportation led to its sales model being divided into intensive marketing within 300 kilometers, selective distribution over 300,800 kilometers and exclusive marketing over 800 kilometers.
This is also the glass company that we often say has a sales radius of 500 kilometers.
Many glass companies mainly depend on the demand when they build factories. With the large-scale development and construction of the central and eastern regions of China, glass companies form a considerable scale in this region.
The glass production enterprises in Hebei (represented by the Shahe district in Xingtai City), Shandong, Jiangsu, and Guangdong have already represented the industry.
China's glass market has a certain regional, but the glass market circulation is not exactly the same. Usually when the glass price in East China rises, due to the convenience of transportation, there will be goods shipped to the East China market; when the glass prices in the area drop, there will be products out of the market, so as to achieve a balance. Due to the inconvenience of transportation in the southwestern region, the market is relatively closed, and the glass price is quite different from other regions. In this way, we will see that glass quotes vary from place to place at the same time. This geographical division is also caused by the glass itself conditions. The
Industry development characteristics
1. Related industrial policies The glass industry is a high-energy-consuming, high-emissions industry. In response to the 12th Five-Year Plan of the glass industry and industry development, regulate investment behavior, prevent blind investment and redundant construction, promote industrial restructuring, achieve coordination and sustainable development, in recent years, the country has made the flat glass industry a key industry for macroeconomic regulation and control. First, a series of policies, regulations and standards have been formulated and promulgated. Relevant departments successively issued the “Several Opinions on Promoting the Structural Adjustment of the Flat Glass Industry”, the “Admission Requirements for the Flat Glass Industry”, the “Notice on Relevant Work for the Elimination of Obsolete Flat Glass Production,” and “Suppression of overcapacity in some industries. And repeated construction of a number of opinions guiding the development of industrial construction, "Interim Measures for the Administration of Admission Notification of Flat Glass Industry". "Guiding Opinions of the State Council on Resolving the Contradictions of Serious Overcapacity."
"Ministry of Environmental Protection's emission standards for nitrogen oxides in the glass industry" and so on. The strict regulations were imposed on the layout of production enterprises, the processes and equipment of the glass industry, the types and quality of glass, the energy consumption of the glass industry, environmental protection, safety, health and social responsibility, and supervision and management, and improved the glass industry. The entry threshold controls the output and scale of the glass industry. The
2. The cyclical nature of the industry In recent years, China's glass industry has developed rapidly, the quality has improved significantly, the variety has increased significantly, and the production of flat glass has grown rapidly.
From relevant historical data we can find that the glass industry has prosperous periods of prosperous recession. This cycle model can be simply described as: Rapid economic growth Fixed assets investment Glass prices rise Economic growth Overheated assets Investment slows down glass prices Economic recovery stimulates rapid economic growth. 2004, 2007, 2010. In 2013, the prosperity of the glass industry.
The dependence of the glass industry on the construction industry is high, and relevant data shows that a typical 90-square-meter home uses about 20 square meters of glass.
This year, the state has implemented new regulatory policies on real estate, and the demand for the entire construction market has been substantially reduced. The glass industry has thus entered a period of recession. The
For glass companies, the input cost of the production line is higher. A good glass production line can cost as much as 100 million yuan. A production line has 500 tons, 800 tons, 1,000 tons. 1300 tons of unequal daily melting capacity.
The average service life of an ordinary production line is seven to eight years. A good production line can last ten to fifteen years.
In general, once the production line is put into operation, it is like an arrow. It cannot control output and inventory through any production stoppage and start-up like other industries. It must be produced within 24 hours. The
In the first half of 2014, the market trend of high and low end of glass is completely different. Compared with the high-end market that runs smoothly, the low-end flat glass market does not perform well. In April and May, the profit was only 460 million yuan, which was in line with the first quarter. In comparison, the drop of 65 was mainly due to a serious overcapacity and a decline in prices caused by the increase in inventories.
In the poor performance of the spot market, the futures market continued its sluggish market, the main contract positions fell, the price fell below 1,000 yuan / ton, the lowest point since the glass futures market.
Experts said that the serious excess production capacity, supply is far more than demand is the fundamental reason for restricting the operation of the industry, the glass industry has faced the highest inventory pressure since 2010. The
In the first half of this year, the building glass and technology glass manufacturing industries above designated size achieved a total profit of RMB 5.67 billion, of which the flat glass products with a larger capacity accounted for only 1.79 billion yuan, and the technical glass realized a profit of RMB 3.97 billion. The operation was not satisfactory. In April and May, the profit was only 460 million yuan, a decrease of 65 compared with the first quarter, which was mainly due to a serious surplus of production capacity and a decline in prices caused by the increase in inventory.
The basis for the continuous rise of flat glass is still not solid, and the continued suppression of new production capacity is an effective means to curb the decline in efficiency. The
As of the end of November 2014, there were 89 float glass manufacturing enterprises in the country. A total of 312 float glass production lines were put into operation. The total float glass production capacity was 1.128 billion heavy boxes per year. Among them: 246 production lines were produced with a production capacity of 941 million boxes/year; 66 cold production lines were suspended, with a production capacity of 187 million boxes/year. In addition to rolling glass, the total production capacity of flat glass is 1.268 billion kw/year. The
The growth rate of new capacity in the first half of the year has slowed down. 11 new ignition production lines, with an added capacity of 52 million boxes/year, a year-on-year decrease of 19. (2) Overcapacity As of the end of 2013, there were 89 float glass manufacturing enterprises across the country and 300 float glass production lines were put into production, including 240 production lines and 60 cold production lines were suspended; the total float glass production capacity was 1.133 billion heavy boxes (of which 911 million heavy boxes were produced in float glass production, 160 million heavy boxes were closed for cold float glass production, and the ignition capacity was 0.62 Million weight box), together with rolled glass and other craft glass, the total production capacity of flat glass reaches 1.25 billion weight boxes. According to data from the National Bureau of Statistics, the actual production of flat glass in 2013 was 780 million heavy cases, and the capacity utilization rate was 62. In the first half of this year, 11 new float production lines were put into production and the production capacity was 52 million heavy boxes, which further exacerbated the overcapacity situation. The
(3) High stock levels Excessive production capacity has pushed up the company's inventory levels. According to the characteristics of continuous production of flat glass, maintaining a reasonable inventory of enterprises is conducive to restraining market fluctuations, and is also the normal state of the production process and marketing. However, over-stocking will occupy a large amount of funds. Once the capital chain is broken, the production of the enterprise will not be maintained, resulting in the closure of the company.
At present, most companies in the flat glass industry have reached the level of 20-day production, and individual companies have even exceeded 30 days, making the industry face the highest inventory pressure since 2010. The
3. Price fluctuations: At present, the price of the glass industry in China is completely market-oriented, and the price fluctuations are relatively large. Taking 5mm float glass as an example, in 2008, the monthly average price was the lowest in 57.3 yuan/weight box in December, and the highest was 70.2 yuan/weight in March. The maximum fluctuation in the year was close to 22.5. The monthly average price in 2009 was the lowest The 48.40 yuan/weight box in February was up to 80.34 yuan/weight box in December. The maximum fluctuation in the year was close to 66. In 2010, due to the favorable influence of the construction industry, the overall price of glass was maintained at a high level. The lowest price in the year was 68.8 in April. Yuan / weight box, the highest price for January 84.3 yuan / weight box, the maximum volatility was 23. And to the average monthly price in 2011 is the lowest in December 57.6 yuan / weight box, up to January 71.7 yuan / weight Box, the maximum volatility is 24. In 2013, the highest in August and August in 2013 was 80 yuan/weight box, and the lowest in December was 75 yuan/weight box. The highest in September 2014 was 70 yuan/weight box, and the lowest was 53 yuan/weight box in November. The
4. Current problems in the industry Relevant data show that in China's glass industry, deep processing accounts for about 65, unprocessed glass is used for 30, and original film direct exports account for 15. Therefore, glass prices are affected by market fluctuations, resulting in deep processing enterprises. The instability of the purchase price of the original film, especially in the face of larger annual orders, is more risky. The
There are many other problems in the glass industry. For example, the quality of glass is not the same, and the quality of the glass itself is uneven. The original glass used in the deep processing industry has many quality problems; the weight of the glass is large, and the required storage space is large due to fragile and difficult storage during handling. , Loading and unloading are difficult, transportation costs are too high; many glass processing companies need to use sufficient funds to stock their goods due to price fluctuations, supply, and procurement issues, resulting in higher capital occupation. These problems have restricted the growth and healthy development of the glass and processing industries.