Glass industry: in December the price difference is still historically high

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4 quarter units under the glass material consumption, soda ash and heavy oil prices, the latest data slightly adjusted the "glass - soda ash and heavy oil price differential" model, the actual gross margin with glass fitting R ^ 2 = 0.82, to better explain and track


Actual earnings.


        December "glass - soda ash and heavy oil price differential," 30.7, the chain fell 12% in November, with 211% growth for 5 months, 30 more than in the history of high level. 4-quarter "price differential" chain increased 29% in Q3, year on year increase of 76% in Q4 last year.
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        December price of 81 yuan glass BMI / weight case, the chain fell 2 percent in November, an increase of 38%. December soda ash prices chain increased by 0.8%, flat year on year, the chain of heavy oil price increased by 6%, an increase of 15% for 4 months to maintain the upward trend.
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        2010-11 times, and bearing our analysis from the three terms.


        (1) law of historical profitability. 99 years, gross margins were up or down 5-8 quarter, last quarter, an increase of 5, started to rise in Q2 this year, an estimated 10 years, continued to Q2.


        (2) earnings down-cycle corresponds to a single month decline in production and export of glass, rising cycle corresponds to a single month, and exports rose, the first half of 2010 expected production and exports will rise month on month trend will boost earnings an upward channel.


        (3) real estate new construction to lag 6-9 months with glass, in June began to rise significantly, according to the current real estate new construction and pipe production next 2-3 quarters will be the peak demand can be expected that the peak current can be profitable continue to next 2-3 quarters.


        2009 new glass capacity 17 67.84 million weight cases. 20-29 2010 New Article ,0.8-1 .1 million weight cases, 28 of the 72.76 million weight cases can not be repaired, 9 24.13 million weight cases of cold repair, 11 of 36.99 million weight cases 10 years cold repair of the current production.


        2009-10 is expected to glass production capacity growth of 1%, 14% of demand growth of 3%, 11% or so. Supply and demand situation in 2010 is weaker than in 2009, the current restrictions on newly approved national policies and new production lines, which will make 11 years of pressure from a small increase in production capacity.


        The first half of 2010, the economy still expected to maintain a quarterly decline in the low season, peak season is still up in Q2. Downward pressure on the second half of the economy, rate would be better than in 2008, earnings still rose by a higher level. Supply and demand picks up again until mid-2011.


        Float glass can present high point margin to 40-50%, a record high, even if the glass drop will also lead to a substantial business-than-expected quarterly results 1-2 up. Jin Jing Science and Technology Agency soda recovery, CSG lowe glass is the leading building energy efficiency policies.