In 2017, the glass futures price continued the upward trend of 2016, and the spot market also performed strongly. In the context of increased production, the price did not fall but rose, indicating that the demand is good. Since the end of 2017, there have been some unusual changes in the industry. The increase in environmental protection may break the current spread structure between various regions, thereby changing the industrial price pattern and bringing greater uncertainty to the future trend of glass futures prices.
1. Production has increased, prices have risen, and demand has exceeded expectations
Increased supply and rising prices indicate better demand.
2. The environmental protection has a large impact, and the spot market price pattern has changed
There are market rumors that there are still a large number of glass production lines in the country that have not obtained a pollutant discharge permit, which brings greater uncertainty to the glass spot market supply in the future. In 2017, the local quartz sand mine in Shahe was banned from mining, which forced glass companies to purchase quartz sand from Shandong, which greatly increased the cost of raw materials. This is a tangible manifestation of the impact of environmental protection on corporate costs. In the future, there will be more environmental factors such as "environmental protection tax" that will continue to increase the cost of glass production in the Shahe area. In the future, the spot price of Shahe Glass will gradually rise, and the product quality will continue to improve. In the end, the price gap with the surrounding areas will be leveled and the title of "price depression" will be eliminated. However, this will be a long-term process and cannot be achieved in one or two years.
3. Prospects for futures trends
1. The status of Shahe's benchmark land is facing challenges
2. The 1805 contract is still a relatively short contract. At the end of 2017, the spot price of glass was still at the highest point of the year. After entering January 2018, the off-season further deepened, and the spot price of Shahe began to fall from a high level. According to the seasonal changes in previous years, it is difficult for the spot price to rise higher than the previous year's high. There are more uncertainties in the 1809 contract. Environmental protection will only increase and not relax. Environmental protection is bullish for glass prices.