Aug 19 | Jubo Info · Glass Industry Commentary: Faster Restarts Slower Cold‑Repairs Where Is Glass Futures Bottom?

Since August, the spot float‑glass market has ended its consecutive decline, with tentative regional price hikes emerging at one point. Yet the rally failed to sustain, and prices soon slipped back into weak‑stable territory. After earlier volatile declines, glass futures staged a mild rebound in early August on limited momentum before weakening again. While both markets trend in the same general direction, subtle divergences exist. The real variables no longer lie in price movements alone.

Spot Market: Short‑lived Price Hikes Amid Persistent Weakness

At early‑August, some southern manufacturers tentatively lifted ex‑factory offers. South China prices once hit RMB 1,220 / ton, with Fujian posting a single‑day gain exceeding 5%. Lacking demand backing, however, upward momentum faded. As of August 17, the national average float‑glass spot price fell back to RMB 1,054 / ton. North China was quoted at RMB 960 / ton, East China dropped to RMB 1,090 / ton, and though South China held near RMB 1,200 / ton, it retreated from recent highs.

In terms of inventories, sample float‑glass producers held total stocks of 74.47 million weight boxes as of August 13, a month‑on‑month drop of 428 000 weight boxes or merely 0.57%, still 17.41% higher year‑on‑year. De‑stocking proceeds slowly, and substantial high‑inventory pressure remains unresolved.

Futures: Low‑level Volatility with Shifting Price Centre

From late July to early August, the dominant glass futures contract completed a full “rebound‑and‑retreat” cycle. Futures institutions share broadly consistent views: expectations of recovering supply cap futures performance, favouring a weak‑volatile outlook; narrow‑range swings persist amid limited improvement. Though futures prices are already low, no fundamental reversal signal has appeared. Futures trade within a low band with feeble rebound volume, and downside risks linger.

Key Supply‑Side Shift: From Cold‑repair Wave to Restart Wave

In past months, market focus centred on accelerating cold repairs and supply contraction. Multiple lines entered cold repair across May‑July. Conditions shifted in August. Two lines in North China ignited for restart on August 18, following earlier restarts in East China. Industry sources note that several cold‑repaired lines are scheduled for re‑ignition, with further restarts expected next week. The industry operating rate ticked higher instead of falling: reaching 66.55% on August 13, up 0.34 percentage points from August 6.

Paradox of Industry‑wide Losses: Why Restart Production?

The sector remains loss‑making across the board. Weekly average losses stand at RMB ‑166 / ton for natural‑gas‑fired float glass, RMB ‑67 / ton for coal‑fired lines, and RMB ‑221 / ton for petroleum‑coke‑fired lines, with an average sector loss of RMB ‑150 / ton. Widespread restarts amid heavy losses reflect complex corporate trade‑offs. Some producers restart ahead of the peak autumn demand season (“Golden September & Silver October”) to capture upcoming demand recovery. Others resume production to avoid high kiln heat‑preservation costs as cold‑repair windows expire.

Nevertheless, restart viability hinges entirely on demand absorption. From January to June, national new housing starts fell 23.4% year‑on‑year, and completed housing projects dropped 23.7%. Downstream processing enterprises report average order backlogs of only 9.4 days, improved month‑on‑month yet still historically low. Regional divergence persists: South China order backlogs stretch beyond two weeks, while Central China sit below five days. Demand fundamentals are far from solid.

Outlook: Where Is the Market Bottom?

Slower cold repairs and accelerated restarts weaken the core logic of supply contraction that supported the market in prior months. With lacklustre demand and elevated inventories, marginal supply growth adds fresh pressure to futures.

Prices below RMB 900 / ton imply losses across the whole industrial chain, limiting sharp further declines. Should restarts speed up and cold repairs decelerate further, supply contraction will reverse, reopening downside room for futures.

When will this downward cycle truly bottom out?

The answer lies not in intraday futures swings, but in restart rhythms, real order inflows for “Golden September & Silver October”, and whether policy‑driven supply‑side adjustments such as Hubei petroleum‑coke retrofits can deliver combined supply‑shrinking effects. Until then, low‑level volatility will likely prevail.

Data & Viewpoint Sources: Jubo Network, Longzhong Information, Galaxy Futures, Nanhua Futures, Shenyin & Wanguo Futures