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Spot off-season restricts price trend

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Spot off-season restricts price trend

Release date:2018-06-12 Author: Click:

In the first half of July, the period price of glass was dominated by high and narrow oscillations. The main contract of the 1709 period was mostly finished in the 1350-1380 yuan/ton range. On the night of July 18, the bulls made a sudden effort and the glass price rose sharply, breaking through a strong high above the 1,430 yuan/ton line and continuing upwards, closing at a daily limit. The spot market has been weak, and the direct trigger for the surge in the price is that the property data released on the 18th is better than expected.

Spot off-season restricted price trend

Since July, the overall trend of the spot market has been sluggish. Since the rainy season has an impact on glass storage, transportation, and construction of buildings, glass production and sales are not very good. The overall production and sales of the factory have been maintained at 89%, with low or even 70%. In the case of an increase in inventories, prices in some regions have been loosened.

On the 11th, the spotted manufacturers of various specifications in Central China took the lead in cutting prices by around RMB 40/t to increase sales and reduce inventory, and then the prices of certain specifications of some manufacturers in Shahe slightly decreased by RMB 10-20/t. The factory cut prices to digest some of the inventories, eased the pressure on supply, and prices stabilized again. However, the trend of small accumulated stocks continues.

It is the weakness of the spot market that has dragged down the trend of glass futures. In the case of rebar and other related building materials varieties sharply higher, the glass futures main contract has been oscillating at a high level, still far from the previous high point.

Real estate data highlights in June

Since the beginning of this year, due to the constant tightening of real estate policies in various regions, the expectation of the market cooling down on real estate is strong. The equivalent growth rate of real estate development investment, new housing starts, and real estate sales has been in a slight downward trend. However, the data released on the 18th of this month showed that, except for the year-on-year growth in the growth rate of completed real estate development investment, the year-on-year growth rate of new housing starts and sales of commercial housing rose from the first quarter to the first month of June. The market performed well and exceeded market expectations.

In addition, the second quarter GDP growth rate announced on the previous day exceeded expectations, indicating that the domestic economy did not decline in the second quarter. Therefore, the overall favorable economic situation has made the market's confidence in the trend of the glass spot market soaring. In the earlier period, due to the weak spot and long-pressed long-term passionate outburst, the glass price rose on the 19th and the main contract closed at a daily limit.

The period price hit a new high in three years

It can be said that expectations and emotions are the main driving forces for the rise in glass prices. In the short term, the glass market has a strong atmosphere, and the overall commodity market is also continuing to be strong in the near future. Short-term glass futures tend to continue strong. However, there is always a time when emotions have subsided, and expectations will change with changes in fundamentals and policy. Before the real positive changes in the spot market, the market will be repeated with changes in mood and expectations, spot the real season to enter at least until August.

At present, the highest spot price of Shahe glass delivery factory warehouse is around 1,300 yuan/ton, and futures have already risen sharply. Even taking into account the high season factor of the 1709 contract, the futures premium is already not low, and companies can consider hedging operations. In addition, taking into account the impact of emotions and other factors, the short-term glass price still has room to rise, but the risk of recovering more. For a period of time in the future, the high probability of a large period of glass futures price will fluctuate widely.

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