The current situation of the industry-the first half of the cold test in the second half of the year waiting for flowers to bloom.

【medium glass net] As the new coronavirus infection pneumonia spread across the country, the epidemic has had varying degrees of impact on China's building materials industry. Due to the lack of timely rework personnel, trade is basically at a standstill. Some downstream construction enterprises, but also due to the national ban on traffic, resulting in logistics flow of people blocked, making the building materials industry to resume work much more slowly than normal years. The negative impact on the glass industry is mainly reflected in two aspects: one is the shortage of raw materials on the supply side. For example, some enterprises have experienced a shortage of coal resources, and some manufacturers have experienced a shortage of quartz sand materials. With the recovery of auto logistics this week, the situation has now eased. The second is the impact of delayed demand on the demand side, resulting in huge pressure on enterprise product inventory, but also makes the current glass prices into a priceless market situation. This is undoubtedly the test that the glass industry is about to face. And whether it can smoothly survive this year's downward pressure, the short-term dependence on the downstream resumption of work, the long-term view from the real estate demand resilience.

Short-term resumption rate is insufficient

Combined with the state in guiding the new coronavirus pneumonia epidemic prevention and control work "to strengthen economic operation scheduling", "as far as possible to reduce the impact of the epidemic on the economy, to actively promote enterprises and institutions to resume production" and other guiding ideology, in mid-to-late February many enterprises in weak areas of the epidemic has gradually resumed production, however, the construction industry belongs to the late resumption of industry, in March the country.Building MaterialsOnly then will the enterprise enter the production recovery period in turn.

Referring to the notice (No. 10) of the leading group office for the prevention and control of pneumonia epidemic caused by novel coronavirus in Zhengzhou, the key livelihood projects (including municipal key projects, rail transit projects, provincial and municipal key projects, etc.) are February 25, the general livelihood projects (including construction projects such as resettlement houses) are March 6, and other projects (including construction projects such as real estate) are March 16. Optimistic estimates, in April and May most of the country (except for the outbreak of particularly serious areas) building materials industry to achieve full normal production.

　　GlassEnterprises to see the current South China East China downstream processing enterprises have been back to work, the delivery rate can reach 50%, other areas of the resumption rate of little change, Shahe region delivery rate is only 2-3%, Hubei region as the second largest glass production area shipments more difficult, so the recent manufacturers out of the overall is still maintained at a low level.

Going to the library is imminent

At present, the risk of glass industry comes from the daily inventory, and the inventory of manufacturers has reached a high level in recent years. Affected by the downstream real estate enterprises in March to resume work in succession, processing enterprises and traders in the resumption of work, the willingness to replenish inventory is not active, to the Spring Festival holiday before the end of the single processing. Therefore, the inventory pressure of production enterprises is generally large, the shipment is not smooth, and the inventory is overstocked, resulting in high inventory of glass production enterprises. Most enterprises have more than 40 days of inventory, or even 45 days.

As of February 28, the total inventory of production enterprises in key monitoring provinces was 86.385 million weight boxes, an increase of 7.78 million weight boxes over last week, an increase of 9.89 percent and 12.63 percent year-on-year. Inventories in North China's Beijing-Tianjin-Hebei region rose 8.2 percent month-on-month to 10.9368 million heavy boxes. Currentlyfloat glassAll regions of the industry have a certain limit of production, ranging from 10% to 30%. This week, individual enterprises adjust the price preferential space, stimulate the market, but the effect is not obvious. According to the inventory cycle of previous years, we expect that this year's inventory inflection point will not come until at least the end of April and the beginning of May. Before that, if enterprises want to go to the warehouse quickly, after the downstream start, price reduction may become an inevitable means.

Real estate resilience remains in the second half of the year.

The main demand side of glass is real estate, automotive manufacturing, and.ExportThese three areas account for 75 per cent, 10 per cent and 5 per cent, 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, the construction season in the second half of the year, however, the original March and April wave of replenishment market was disrupted by the epidemic rhythm, we expect demand will be concentrated in the second half of the release, the degree of release depends on the downstream real estate construction completion.

Affected by the epidemic, since the Spring Festival holiday in 2020, the national commercial housing turnover has dropped significantly. During the 2020 Spring Festival holiday (1.24-1.30), new home turnover in 30 large and medium-sized cities decreased by 80.8 compared with last year's Spring Festival holiday (2.4-2.10), while sales in the week after the holiday (1.31-2.6) fell by 97.3 compared with the week after last year's holiday (2.11-2.17). Even though work has been redone in various places, the transaction volume of commercial housing remains at a very low level, which is in sharp contrast with the Spring Festival in previous years. At present, most housing enterprise projects are still at a standstill, in the context of the government issued a document to encourage the resumption of work, a large number of migrant workers continue to return, considering two weeks of isolation time, it is expected that the construction of non-Hubei regional projects in mid-to-late March will be on track.

It is worth noting that from the national macro-control level, the real estate marginal relaxation policy has begun. Especially in the supply side of the continued strength, the recent introduction of policies can be seen. Many governments have introduced supply-side measures, including delaying the payment of land transfer fees and adjusting presale conditions, while the CBRC and the central bank have also issued documents to encourage measures such as appropriate reduction of lending rates, improvement of loan renewal policy arrangements, increase of credit loans and medium-and long-term loans. On February 20, the 5-year LPR was cut by 5 bp. On the whole, whether it is the fine-tuning of industry policies or the loose liquidity environment, the introduction of intensive policies has provided support for alleviating the short-term cash flow pressure of real estate companies and maintaining the stability of the property market.

However, only when the start is transformed into completion, will the consumption of glass, from the current sales data, the market demand release power is insufficient, short-term real estate will continue to be under pressure. Whether the backlog of demand in the second half of the year will usher in a concentrated release remains to be seen. In terms of overall demand, this year's glass market will not be better than 2019, but short-term bearish, long-term is still very likely to come out of the second half of 2019 upward market.