Heavy rain hit the Shahe glass market geometric impact

    Futures Daily reporter learned that in recent days, heavy rain and extremely heavy rain in the Beijing-Tianjin-Hebei region, the Central Meteorological Observatory issued two red warnings for heavy rain, Hebei Baoding, Shijiazhuang, Xingtai, Handan local areas of rainfall of more than 600 mm, the largest cumulative rainfall appeared in Lincheng County, Xingtai, Hebei, reaching 994.6 mm.

    As the largest glass production and marketing base in China, Shahe City is also a county-level city under the jurisdiction of Xingtai, and the impact of the glass market in this area has caused widespread concern in the market.

    "Heavy rain interrupted the normal production and marketing process, the current security of production is the first priority, Shahe local glass sales stage stagnation." Founder medium-term futures analyst Wei Zhaoming said.

    During the interview, the reporter learned that the biggest impact of the rainstorm on the Shahe glass market is logistics transportation, including raw material procurement and finished product sales. During the rainstorm, the road water, short-term logistics transport is more difficult. According to local market participants, at present, Shahe deep processing market east of the highway is an economic development zone, not allowed to load.

    Huo Dongkai, head of the futures department of Hebei Wangmei Group, also confirmed to reporters that the short-term impact of heavy rain on the Shahe market is mainly reflected in the trade circulation link. "Because glass cannot be stored in the rain for a long time, and glass cannot be shipped in rainy days, the market circulation link has almost stopped." Huo Dongkai said that the current assessment of the rainstorm simply belongs to the extent of affecting transportation and circulation. "This has happened before, and the rain in July 2016 was more sustained than this one, and the impact on the market was only circulation."

    According to Miao Yunping, an analyst with Longzhong Information, there were traffic controls in the Shahe area on Monday, the factory basically did not ship, and the market did not take goods. "Affected by rainfall and flood discharge, the factory and the market basically did not go much goods." Last weekend, Shahe walk goods can be, the production and sales rate is high and low, the average is about 70%, now do not ship, it is estimated that the production and sales rate will be very low." 'she said.

    "Limited by natural conditions, it is certain that production and sales will weaken during the rain, and downstream demand will be released again after the weather improves." Wei Dynasty Ming Dynasty.

    The reporter learned from the Shahe market that some local factories and warehouses have the phenomenon of water, but it is not a universal phenomenon. It is understood that Shahe urban areas have high and low sections, and most manufacturers and traders are concentrated in the higher sections. Low-lying sections of the distribution of some processing enterprises, low-lying sections may appear in the situation of water. According to the Shahe glass company, the quality of the soaked glass will be affected to a certain extent, and after the weather clears up, the company may choose to sell at a lower price.

    Yesterday, the network of Shahe Zhengda and Changhong respectively have a 600 production line into the furnace, is expected to affect the production of a week. In this regard, the reporter also got in touch with Zhengda Glass in the first time, the relevant person in charge of the glass factory confirmed to the reporter that by the impact of the rainstorm and the sudden discharge of the upstream reservoir, the factory did appear in the water situation, some systems were affected, and is currently actively repaired and resumed production as soon as possible. For the network to affect the weekly output of the statement, the reporter believes that it may be exaggerated.

    In addition, in the recent market, the shortage of raw materials of glass manufacturers has limited impact.

    According to market participants, affected by the summer overhaul of soda ash enterprises, the domestic soda ash inventory fell by about 200,000 tons in July, and the short-term domestic soda ash supply is tight. However, due to concerns about the impact of declining supply, glass factories have slightly increased their replenishment efforts in the past one to two weeks. Overall, the recent rainstorm of about three days has a limited impact on the supply of raw materials for most glass enterprises in the Shahe area.

    "From the industry data, the stock of Shahe local glass is not high, and it is not difficult to ensure the safe storage of the current stock." Raw material stocks such as soda ash are maintained at a low level, and there is no concern about running out in the foreseeable period of time. If the duration of the rainy weather is significantly longer than expected, the risk of glass production and storage is also alarming." Wei Dynasty Ming Dynasty.

     In this interview, most glass companies reflected that the current situation did not significantly exceed expectations, and the overall impact on the local market was little. The weather forecast shows that the round of rain will gradually end from August 1, and it is believed that market conditions will recover immediately.

    "Because of the low inventory of manufacturers in Shahe area, the market inventory is also very low, there is no pressure on manufacturers at present, and the market will gradually return to normal after the normal operation of the circulation link." Huo Dongkai said.

    According to Longzhong data statistics, the current total glass inventory in North China, including Shahe, is 330,000 tons, which is at a low level in nearly five years, far lower than the 1.03 million tons in the same period in 2022. Among them, the inventory of production enterprises in the Shahe area is 69,000 tons, which is also at a near five-year low level.

    "For glass enterprises in Shahe area, short-term transportation disruption will lead to a reduction in overseas purchases and an accumulation of glass inventory, but there are more glass processing enterprises in Shahe, and the disruption of external transportation did not lead to a very low production and sales rate, and the range of accumulation is more limited." Citic Construction and investment futures analyst Hu Peng said that it is expected that after the end of the heavy rain this week, logistics will resume one after another, and the production and sales rate of Shahe glass will gradually increase.

    "The market should rationally look at the impact of the rainstorm on glass, the rainfall brought by the rainstorm is large but the duration is short, and the impact on the price is more limited." Hu Peng said.

    It is worth noting that the short-term impact of the rainstorm on the market is more reflected in the market sentiment, and the impact on the disk is still based on the mainstream regional "low inventory + peak season + policy".

    "The market has strengthened significantly since Monday, mainly due to concerns about short-term supply reduction. The market is still uncertain about the disaster situation in the Shahe area, and worries about supply disruption will reduce the supply of low-priced goods." Hu Peng said that in addition, the recent frequent stabilization of real estate policies, real estate expectations to usher in improvement, glass demand is expected to be boosted. At present, it is the stocking window of the traditional peak season of "gold nine silver ten", and the expected improvement has led to a sharp rise in futures prices.

     In this regard, Wei Zhaoming also believes that the short-term market or worry that some of the glass after soaking into the water flows to the market, and the low-cost supply has an impact on the glass price system. From a longer time horizon, the glass "gold nine silver ten" peak season market gradually opened, the short-term correction will provide a rare opportunity to buy hedging.