On December 16, the Ministry of Industry and Information Technology openly solicited opinions on the measures for the implementation of capacity replacement in the cement Glass Industry (revised draft). Considering the marginal change of this replacement scheme, this paper focuses on the recent situation of the glass industry and the impact of the new replacement rules on the industry.
What is the impact of the new regulations on the float pattern: appropriately relax the requirements of deep processing replacement, and strictly control the tone unchanged.
Compared with the first draft revised in October, the new rules for float glass capacity restrictions remain basically unchanged, strictly enforced: 1) production lines that have been suspended for two years or more cannot be used for capacity replacement, and 2) the ratio of capacity replacement remains unchanged. We believe that under the new regulations, the overall supply of float glass is expected to maintain a marginal tightening state. At the same time, considering the current shortage of photovoltaic glass, the Ministry of Industry and Information Technology has loosened the restrictions on photovoltaic glass, its new projects can not develop capacity replacement, but it is also prohibited to return to the production of building glass.
Conversion of photovoltaic backplane: it is difficult to change production to make up for the gap of backplane in the short term.
Glass industry experts believe that for float glass, there are more than 80% technical differences with Calendering glass, and it is difficult to convert Calendering glass under the original float process, and the release period is longer, which is no less than the new Calendering production line. At present, manufacturers mainly supply photovoltaic backplane through ultra-white float production line. at present, due to the shortage of photovoltaic glass and high price, its siphon effect attracts about 7-8 ultra-white float production lines to produce photovoltaic backplane, which reduces the supply of float glass to a certain extent. resulting in a slight shortage of building glass products, prices continue to rise. At the same time, experts expect that the increase of photovoltaic modules is expected to continue to rise rapidly in the future, the demand for glass may exceed market expectations, and the progress of production of Calendering glass may be lower than expected, and float glass will still act as a supplement to the backplane. In the future, there may still be some ultra-white float production lines to produce photovoltaic backplane, further tightening the float supply pattern.
Whether the float's high profits can be maintained: demand is still strong and supply is still tight.
Since December, due to strong downstream demand and low inventories of production enterprises, glass prices have changed the consolidation trend in previous years, and prices have risen higher than expected and exceeded market expectations. Glass industry experts predict that in January-February next year, under the stagnant demand, glass prices may be slightly reduced, the rate is expected to be similar to last year, the reduction is limited. At the same time, we believe that the real estate completion end in the next 2-3 years will maintain a relatively high demeanor, leading to a continuous rise in glass demand, while zombie production capacity under the new regulations will be further cleared, and part of float glass production capacity is expected to be transferred to photovoltaic backplane, the overall supply will show a state of contraction, glass prices as a whole will remain high next year, and the price center is expected to further rise.
Whether the photovoltaic glass bibcock advantage can be maintained under the new policy: the growth space is open, the bibcock advantage remains unchanged.
The revised version of the Ministry of Industry and Information Technology stipulates that photovoltaic and automotive glass projects do not have capacity replacement plans, but need to hold hearings and promise not to produce building glass. Experts believe that the Ministry of Industry and Information Technology has noticed the current shortage of photovoltaic glass and loosened production capacity restrictions, and the industry trend is expected to further improve. At the same time, experts believe that there is still a high threshold for photovoltaic Calendering glass investment, and a large amount of capital investment, technical research and development, equipment configuration and personnel supplement will still be important determinants of new photovoltaic construction. At the same time, taking into account the production cycle, good products climbing and other factors, short-term capacity investment may be lower than market expectations, while the original leaders in the industry due to the existence of pre-investment inertia, technology accumulation, good upstream and downstream relationship. Will get rid of the shackles of production capacity indicators, fully benefit and make rapid progress.
Under the condition of tight supply and increased demand, we are optimistic that the price center of float glass will move up further, the price of superimposed soda ash is low, and the industry will usher in a high business cycle of rising prices and profits.