1, the demand downward superposition of cold repair peak lag

Demand for completion of real estate in 2022 was lower than expected, and key real estate data also showed a downward trend. Due to the relatively high age of production line kilns in the industry, the market expected centralized cold repair in 2022. In fact, due to the abundant cash accumulated by incumbent enterprises in the high economy of the industry in 2021, the operating cash flow performance of 2022H1 was not sufficient, so there was no centralized cold repair. With the acceleration of 2022H2 float glass profit decline, enterprises have been slow to concentrate cold repair.

Market expectations of large cold repair enterprises did not appear in time. Due to the relatively high age of production line kilns in the industry, the market expected centralized cold repair in 2022. In fact, due to the abundant cash accumulated by incumbent enterprises in the high economy of the industry in 2021, the operating cash flow performance of 2022H1 was not sufficient, so there was no centralized cold repair. With the acceleration of 2022H2 float glass profit decline, enterprises have been slow to concentrate cold repair.

After 2022Q3, the industry cold repair peak began to appear. In the environment of declining demand, the industry capacity still reached a high of 172,500 t/d in 2022, leading to increasing downward pressure on float glass price. After July 2022, with the further decline of the glass economy, the cold repair capacity of the industry began to increase. Production capacity fell from 172,500 t/d to 161,800 t/d, and operating rate fell from 89.3% to 81.3%. The cold repair capacity of 2022Q3 and 2022Q4 is 17 and 14, respectively, and the corresponding daily melting capacity is 110,000t /d and 80,400 t/d, respectively. The ignition and resumption rhythm of production capacity in the industry remains normal.