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Industry status - the first half of the cold test of the second half of the static waiting for flowers

(Summary description)

Industry status - the first half of the cold test of the second half of the static waiting for flowers

(Summary description)

Information

[China glass network] with the new coronavirus infection pneumonia spread throughout the country, the outbreak of China's building materials industry have produced different degrees of impact. Trade is basically at a standstill because reworkers are not available in time. Some downstream construction enterprises, also because of the national ban on traffic, lead to the logistics flow of people blocked, so that the building materials industry return to work far more slowly than the normal year. The negative impact on the glass industry is mainly reflected in two aspects: one is the shortage of raw materials at the supply end. For example, some enterprises have experienced the shortage of coal resources, and some manufacturers have also experienced the shortage of quartz sand materials. The situation has eased this week as car logistics resumed. The second is the effect of the demand delay on the demand side, which leads to the huge pressure on the inventory of products of enterprises, and also causes the current glass price to fall into the situation of price without market. This is undoubtedly the glass industry will face a test. Whether it can smoothly survive the downward pressure this year depends on the resumption of work in the downstream in the short term and on the resilience of demand from real estate in the long term.

Short - term return to work rate is insufficient
Combined with the national epidemic prevention and control work in guiding the new coronavirus pneumonia "to strengthen the economic operation scheduling", "as soon as possible to reduce the economic impact of epidemic, should actively promote the enterprises and institutions to return to work and production" the guiding ideology, such as mid to late February many weaker epidemic areas enterprise has gradually return to work and production, construction industry belongs to return to work later, however, in March the national building materials enterprises will in turn into production recovery.
 
Going to the library is imminent
At present, the risk of glass industry comes from inventory, which has reached a high level in recent years. Affected by the downstream real estate enterprises to continue to return to work in March, processing enterprises and traders after the resumption of work, inventory will not be active, to the Spring Festival holiday before the tail processing. As a result, the inventory pressure of production enterprises is generally large, resulting in poor delivery and inventory overstocking, resulting in high inventory of glass production enterprises. Most enterprises have more than 40 days of inventory, even to 45 days.
 
Property resilience in the second half of the year
The main demand areas of glass are real estate, automobile manufacturing and export, accounting for 75%, 10% and 5% respectively. Among them, the demand brought by real estate even accounts for 75-80%, so the completion cycle of the downstream real estate industry plays an important role in glass consumption. The first quarter is the off-season of glass originally, and the construction peak season is in the second half of the year. However, a wave of stock replenishing market in March and April was disrupted by the epidemic. We expect that the demand will be released in the second half of the year.
 
However, the consumption of glass will only be generated when the construction starts and the construction is completed. Judging from the current sales data, the market demand release momentum is insufficient, and the short-term property will continue to be under pressure. It remains to be seen whether pent-up demand in the second half of the year can be unleashed en mass. Overall, the glass market won't be better this year than in 2019, but short term bearish, long term still has a good chance of coming out of the rally in the second half of 2019.
 
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