Sep 30 | Jubo Info · Float Glass Market Review: Glass destocking slows; inventory rise looms. Can fragile balance hold?

Float glass production lines saw concurrent drawing, ignition and cold repairs in September. Two lines underwent cold repairs and another two were ignited. In addition, two previously ignited lines started drawing in mid-September. Coupled with output ramp-up of earlier restarted lines, daily melting capacity rose and capacity utilization edged higher. Instead of continuing the contraction seen from June to July, supply expanded slightly. Combined with failed pre-holiday inventory drawdown and weak demand, this forms the core market contradiction.

I. Behind production line tug-of-war: passive choices amid divergent losses

Cold repairs dominated in June-July. Yet in August-September, some lines resumed operation despite losses, due to cost gaps across fuel routes. Coal gas lines posted losses of around -87 RMB/ton, still bearable. Natural gas and petroleum coke lines suffered deeper losses, but mild price rebounds eased cash pressure for some players, reducing willingness for voluntary cold repairs. Low-cost lines held operation; high-cost lines delayed cold repairs after narrowed losses. Supply contraction thus became gradual and contested rather than a mass shutdown. Net capacity growth in September proves supply has expanded instead of shrinking.

II. Failed pre-holiday destocking is the core issue

The Golden September & Silver October peak season has passed its halfway mark, but pre-holiday stock build-up never materialized. Longzhong Information noted: “Ahead of the double holidays, no pre-holiday restocking boom or improved sales were seen in float glass. Overall shipments remained flat and effective pre-holiday destocking failed.” As of Sep 24, total inventory of sampled national float glass manufacturers stood at 69.857 million weight boxes, flat month-on-month and up 17.69% year-on-year, equivalent to 32.1 days of stock coverage.

Monthly inventory down 4.192M weight boxes (-5.66%), flat week-on-week in final week.

Weak demand is the root cause. Housing completion area fell 23.7% YoY in H1. Deep-processing firms had average order backlog of merely 10.1 days, down 2.11% MoM and 3.93% YoY, hitting a five-year low for the period. Downstream buyers adopt hand-to-mouth purchasing with little willingness to stock up in advance. The peak season remains at the stage of expectation verification, and order growth is yet to be confirmed.

III. Market sentiment: extreme bearishness with nearly no divergence

Industry sentiment survey shows 50% of industrial participants expect spot prices to fall, 50% forecast consolidation, and zero hold bullish views. Bearish arguments center on high inventory, post-holiday stock accumulation and potential price cuts by manufacturers to clear stocks. Bullish voices are almost absent.

Such unanimous pessimism warrants caution. While all market participants await post-holiday price declines, a few manufacturers have cut prices proactively to clear goods and avoid inventory pressure, triggering price drops in some regions. These early movers may have spotted risks overlooked by others.

IV. The real test comes after the holidays

Downstream factories will suspend operations during the double holidays, while raw glass producers keep running, bringing mounting inventory pressure — a forecast based on current supply-demand fundamentals yet to unfold. On the supply side, newly added capacity in September will be gradually released in October. Without a matching rise in cold repairs, daily melting capacity may climb further. On the demand side, if October order recovery disappoints compared with September, peak-season pricing expectations will be invalidated.

The glass market now maintains a weak balance: prices have cost support against sharp falls but lack demand drivers for rallies. Prices below 900 RMB/ton put the whole industrial chain in loss, leaving limited room for further slumps. Still, high inventory and feeble demand heavily cap upside potential.

This is where divergence lies. Some argue daily melting capacity remains historically low and cold repairs continue, so supply will eventually adjust. Others point out absent pre-holiday restocking, almost certain post-holiday inventory build-up and extra supply pressure from September’s net line additions. Optimists believe cost support can underpin prices; pessimists expect further downside once peak-season hopes fade.

Manufacturer shipments and inventory changes in the first week after holidays will offer the first clue to resolve this divergence. The recovery of deep-processing orders in mid-to-late October will determine how strong the “Silver October” season turns out. Until sustained large-scale inventory reduction emerges, the fragile weak balance of float glass lines will persist.

Data & Sources: National Bureau of Statistics, Jubang Glass, Longzhong Information, Zhuochuang Information, Mysteel, major futures websites.