1. Industry chain situation
Float glass is a kind of manufacturing process, which refers to glass made by floating method.
The general principle is to pour the molten glass liquid on the surface of the liquid (liquid tin) whose specific gravity is greater than that of the glass liquid to shape the glass. Float glass has a smooth surface, relatively uniform thickness, better transparency than other glasses, and excellent optical properties. It can be used to make mirrors, car glass, etc., it can also be used to make TV background walls, screens, etc., and it can also be used in civil buildings. The float glass industry has a rich industrial chain.
The upstream of the industry mainly includes raw materials such as soda ash, limestone, and dolomite; the midstream mainly includes deep processing of insulating glass, tempered glass, laminated glass, and coated glass; the downstream demand of the float glass industry can be mainly divided into architectural glass , automotive glass, photovoltaic glass, electronic glass, home appliance glass, etc.
2. Upstream Analysis
The float glass industry has a rich industrial chain. From the perspective of the upstream cost structure, raw material costs account for about 43%, which is the largest source of cost, followed by fuel costs accounting for 34%. Among the cost of raw materials, soda ash is the largest source of cost, accounting for more than half of the cost of raw materials, followed by quartz sand accounting for 27%. It can be seen that soda ash and quartz sand are the two major raw materials in the upstream. From 2016 to 2022, my country’s soda ash production will grow steadily, from 25.883 million tons in 2016 to 29.133 million tons in 2021. As of the Q2 quarter of 2023, China’s soda ash production will reach 25.444 million tons.
As far as the change of China’s quartz sand production is concerned, as the overall demand for downstream glass and metallurgy continues to grow, my country’s quartz sand production has shown a steady growth trend. The data shows that China’s quartz sand production will be 91.23 million tons in 2021, a year-on-year increase of 91.23 million tons in 2020. An increase of 4.08%. Although the current domestic production of quartz sand continues to grow, the overall supply still cannot meet domestic demand, and the proportion of imports continues to increase while prices continue to rise.
In terms of changes in the import and export volume of quartz sand in China, the import volume is significantly higher than the export volume. As the overall management of quartz sand in China has become more stringent, the overall domestic production of quartz sand has not increased as much as the demand, resulting in continuous growth in the import volume of quartz sand. The data shows: In 2021, the import and export volume of quartz sand in China will be 3.4547 million tons and 82,900 tons respectively, and in 2022 the import and export volume of quartz sand will be 3.6532 million tons and 100,100 tons respectively.
3. Midstream Analysis
Since 2016, my country’s float glass production has shown an overall growth trend. Data show that in 2021, my country has produced a total of 1,016.647 million tons of float glass, an increase of 8.4% over the same period last year.
Fuyao Glass and Kibing Group are key enterprises in China’s float glass industry. In recent years, the revenue of the float glass business of the two companies has shown an upward trend. In 2019, the revenue of the float glass business of Fuyao Glass and Kibing Group was 3.645 billion and 8.528 billion, and in 2021 it will rise to 4.029 billion and 12.42 billion respectively. As of the first half of 2022, the float glass business revenue of Fuyao Glass and Kibing Group will reach 2.058 billion and 5.245 billion.
Judging from the production of float glass by the two companies in recent years, the production of float glass has basically remained stable, and the production of float glass of Fuyao Glass has dropped slightly from 1.44 million tons in 2019 to 1.42 million tons in 2021; Kibing Group will increase from 118.9 million heavy boxes in 2019 to 119.2 million heavy boxes in 2021.
4. Downstream Analysis
At present, China’s float glass is widely used in construction furniture, home appliances, automobiles, high-tech and other industries. Among them, the architectural furniture industry is the main application market, accounting for about 70% of the market share. The development trend of the construction industry largely determines the overall trend of China’s glass demand market. In recent years, the construction area of China’s construction industry has continued to grow. The data shows that the housing construction area of China’s construction industry will reach 1.6755 billion square meters in 2022, an increase of 5.4% over the previous year. In the first half of 2023, the housing construction area of Chinese construction enterprises was 13,073,672,100 square meters, a year-on-year increase of 1.7%. It can be seen that the demand for float glass is relatively stable.
Home appliances are also an important downstream application of float glass, and the high prosperity of the home appliance industry can increase the demand for float glass. Judging from the operating income of China’s home appliance industry in recent years, except for the sharp drop in operating income due to the impact of the epidemic in 2020, the overall trend is on the rise. As of 2022, the operating income of China’s household appliances will reach 2,730 billion, with a growth rate of 19.81%.
Photovoltaic modules are the downstream application industry of photovoltaic glass. Photovoltaic modules, also called solar panels, are the core part of solar power generation systems. Against the background of the vigorous development of China’s photovoltaic industry, the output of China’s photovoltaic modules has also grown rapidly. From 2017 to 2022, the output of photovoltaic modules in my country will increase year by year, and the growth rate will gradually accelerate. In 2022, the output of photovoltaic modules in my country will increase to 205GW, a year-on-year increase of 49.07%.