Caitong Securities: The contradiction between glass and glass fiber supply and demand is still low, and demand for dielectric products is high

The Zhitong Finance App learned that Caitong Securities released a research report saying that the conflict between supply and demand in the float glass industry is quite obvious. It is expected that before a new round of collaborative policies or large-scale cold repairs, glass prices may continue to fluctuate around the bottom range. On the supply side, although major companies in the industry issued price increase notices in early November, some orders continued in the early stages, compounded by average downstream demand, and the contradiction between supply and demand in the traditional thick yarn market is still obvious. Prices in the domestic e-yarn market were basically stable in November. Looking at high-end products, short-term market demand is still strong. There are still gaps in the low-dielectric generation and second-generation markets, while the low-CTE market as a whole still has a large gap. Prices of high-end products are likely to maintain an upward trend in the short term.

The main views of Caitong Securities are as follows:

The conflict between supply and demand in the glass industry is still there, and the price bottoming out may continue

According to data from Zhuochuang News, the average price of domestic float glass was 1151.40 yuan/ton this week, down 1.17% from last week's average price. On the demand side, the real estate industry has not stabilized. Combined with demand in the north weakening further due to low temperatures, industry demand may continue to shrink; on the supply side, although the overall profit of float glass is currently in loss, or due to the good overall profit of the industry in 2023-2024, loss-making companies may still have sufficient cash flow to support the start of production lines. Currently, there are 265 float glass production lines in the country, and 217 are being produced. Currently, the industry's capacity utilization rate of 84.10% is still high. Overall, the conflict between supply and demand in the float glass industry is quite obvious. It is expected that before a new round of collaborative policies or large-scale cold repairs, glass prices may continue to fluctuate around the bottom range.

The glass fiber industry is still booming, making it difficult to increase short-term demand

On December 18, the average price of 2,400tex alkali-free direct wound yarn in China was 3535.25 yuan/ton, the same as the average price of the previous week. On the demand side, demand in the wind power market may narrow to a certain extent next year after the rush to install at the end of the 14th Five-Year Plan; however, demand for thermoplastics may continue to grow as new energy vehicles become lighter and household appliances are upgraded. On the supply side, although major companies in the industry issued price increase notices in early November, some orders continued in the early stages, compounded by average downstream demand, and the contradiction between supply and demand in the traditional thick yarn market is still obvious. Overall, since 2025, the glass fiber industry has continued to be characterized by high production capacity and imbalance between supply and demand.

Electronic yarn just needed support, and demand for low dielectric products is still tight

Prices in the domestic e-yarn market were basically stable in November. The overall price of the downstream CCL market was mainly purchased as needed, but in the later stages, demand support was still uncertain, and the current industry's overall profit performance was still declining, and there was not much room for price increase; in terms of high-end products, short-term market demand was still strong, and there was still a gap in the low-dielectric generation and second-generation markets, while the overall low-CTE market still had a large gap. Prices of high-end products are likely to maintain an upward trend in the short term.

Investment advice

The cement sector has a high dividend allocation value and a safe-haven logic, as well as a fundamental logic where demand is picking up and prices are expected to bottom up. It is recommended to pay active attention, focusing on Conch Cement (600585.SH) and Huaxin Construction (600801.SH). It is recommended to focus on Shangfeng Cement (000672.SZ) and Tianshan Co., Ltd. (000877.SZ). A reversal of the difficult situation in the consumer building materials industry is expected and domestic policies are increasing logic. The marginal effects of subsequent demand stabilization, price stabilization, and cost reduction and efficiency are gradually showing in the results. The focus is on recommending Three Trees (603737.SH), Rabbit Baby (002043.SZ), Dongfang Yuhong (002271.SZ), and Keshun Co., Ltd. (300737.SZ).

Risk Alerts

Anti-domestic policies fall short of expectations, downstream demand falls short of expectations, and product yield falls short of expectations.