China Galaxy Securities: Strong price increase trend of electronic cloth, focus on leading companies with excellent performance reports

The Zhitong Finance App learned that China Galaxy Securities released a research report saying that the boom in specialty glass fiber products is highly certain, and the release of superimposed supply-side production capacity is sluggish. It is expected that the shortage of supply and demand for electronic cloth will continue in the short term, prices are still expected to rise, and the profits of glass fiber companies with related production capacity layouts are expected to rise. Contradictions between supply and demand in the cement industry are prominent, and policies still need to be strengthened to speed up the clearance of production capacity in the industry. The overseas cement market has good development prospects. Demand and prices are superior to the domestic cement market. Cement companies with the advantage of overseas production capacity layout are expected to make profits, and their overseas business is expected to support corporate performance. Urban renewal drives the release of demand for consumer building materials in the renovation and repair market. Consumption upgrades will drive an increase in demand for high-quality green building materials, and leading enterprises with channel layout advantages and brand advantages are expected to continue to consolidate their market position. Expectations for an improvement in terminal demand are weak, and “reverse internal roll” is expected to accelerate supply-side optimization of glass.

The main views of China Galaxy Securities are as follows:

Glass fiber: The thick yarn market is weak and prices are under pressure, and the price increase of electronic yarn is strong

In terms of thick yarn, the increase in supply in July was limited, and inventories rose slightly, but overall manageable; the release was average, wind power orders fell short of expectations, thermosetting shipments declined, and thermoplastic shipments were stable. In the face of weak supply and demand, the prices of thick yarn companies in July fell compared to the previous period. Looking ahead, the short-term market is weak, and wait-and-see sentiment in the market is increasing. It is expected that the price of thick yarn will run steadily or weakly in August. In terms of e-yarn, the price of e-yarn/cloth continued to rise in early July, and the increase was obvious. The increase in e-yarn supply was limited. Orders from downstream CCL manufacturers were still full during the month, demand for high-end products maintained a certain increase, and the overall e-yarn/cloth market continued to be in short supply. Looking back, the company is currently in a state of zero inventory. Combined with the production capacity layout plans of various enterprises, it is expected that short-term supply will continue to be tight, and the price increase trend is expected to continue.

Cement: Demand is weak in the off-season, supply pressure is prominent, and low prices continue to weaken

Demand in the cement market was seasonally sluggish in July. The nationwide clinker line shutdown rate was less than in June. The supply pressure on the industry was obvious, inventories continued to rise, and the overall average price of cement across the country showed a downward trend, and prices were at the bottom of history. Looking back, August is still in the traditional off-season. Demand is expected to continue to weaken, supply and inventory pressure is high, and cement prices will continue to fall; with the advent of “Gold Nine Silver Ten,” demand is expected to improve seasonally, but the price support effect may be limited, and the price improvement is not expected to be obvious.

Consumer building materials: short-term home improvement demand is under pressure, leading value in the stock era is highlighted

Retail sales of construction and decoration materials fell 8.8% year on year from January to June 2026, and the decline was 0.4 pct higher than in January-May. Among them, retail sales in a single month in June fell 10.5% year on year and increased 14.2% month on month. The decline in real estate sales has curtailed the increase in demand for home improvement retail building materials. Looking ahead, the continued implementation of medium- to long-term urban renewal strategies will release demand for repairs and renovation. The promotion of “good house” construction standards will increase the market penetration rate of high-quality green building materials, and leading consumer building materials companies with product quality advantages and production technology and environmental protection advantages are expected to benefit. Furthermore, the current pressure on product prices is compounded by the pressure on raw material costs, and the profits of small and medium-sized enterprises continue to be squeezed, which is expected to accelerate the clearance of the industry and gradually gather market concentration towards leaders.

Float glass: weak demand compounded by high inventories, prices continue to bottom

High temperatures and rain affected demand for float glass in July. Orders from downstream processing plants were insufficient, transactions were weak, and overall production and sales were difficult to reach balance; monthly production capacity decreased month-on-month, corporate inventories remained high and stable, and the pressure to go to storage was high; float glass prices continued to bottom out in July. Looking ahead, demand for real estate terminals is shrinking, compounded by the seasonal off-season in August. Short-term demand is expected to be weak. Under pressure from high inventories, prices are expected to drop further in August, and the decline may narrow.

Risk warning: the risk of large fluctuations in raw material prices; the risk that downstream demand falls short of expectations; the risk that the industry's new production capacity exceeds expectations; the risk that policy progress falls short of expectations