China Galaxy Securities has released a research report indicating that the cement market gradually resumed activity in March following the holiday period, although demand in most regions recovered to only 50-60% of normal levels. By late March, staggered production cuts had ended nationwide, with most clinker lines operating again. Clinker inventories saw a slight month-on-month decrease, while average prices remained flat compared to the previous month.
In the electronic yarn sector, strong demand for high-end products continued in March. With traditional fabric capacity being converted to other uses, supply in the electronic yarn and fabric market became increasingly tight, driving prices upward at a rate similar to the significant increases seen in the previous month. Looking ahead, although new production capacity for conventional electronic yarn will gradually come online and increase supply, substantial demand gaps remain for mid-to-high-end products. Downstream electronic fabric markets face slow growth in loom capacity, making it difficult to alleviate short-term supply shortages. Further price increases for electronic yarn and fabric are anticipated.
Key views from China Galaxy Securities are as follows:
Cement: Demand recovered slowly in March, with prices expected to show a slight upward trend. As demand gradually improves in April and current cement prices remain at historically low levels, companies have strong incentives to raise prices. A modest price increase in the cement market is forecast for April, though changes in regional supply-demand dynamics warrant close attention.
Fiberglass: Cost factors drove coarse yarn prices higher, while tight supply-demand conditions led electronic yarn to lead price gains. In March, transactions improved for most coarse yarn manufacturers, with short-term demand performing reasonably well. Overall supply increases for coarse yarn were limited during the month, leading to small price hikes. Rising costs for raw materials and precious metals are increasing cost pressures for tank furnace operators, suggesting price increases will continue into April. For electronic yarn, strong demand for high-end products persisted, and the conversion of traditional fabric capacity exacerbated supply tightness, sustaining the price uptrend.
Building Materials: Retail sales faced pressure during the off-season, while rising raw material costs prompted another round of price hikes by manufacturers. From January to February 2026, retail sales of building and decoration materials fell by 2.2% year-on-year, though this decline narrowed by 0.5 percentage points compared to the full year 2025. Weak real estate sales further dampened the home improvement market. With the first quarter being a seasonal low, demand for retail building materials is expected to see marginal improvement in the second quarter. The ongoing implementation of urban renewal strategies will generate demand for repairs and renovations, while advancing "good housing" construction standards will boost market penetration of high-quality green building materials. Leading companies with superior product quality and environmentally friendly production technologies are well-positioned to benefit. Recent price increase announcements by several major building material manufacturers, driven by higher raw material costs and supported by "anti-internal competition" policies, are expected to help restore profitability for industry leaders.
Float Glass: Prices saw a slight rebound in March, but significant demand improvement remains challenging. Downstream rigid demand and speculative purchasing provided temporary support for float glass shipments, with overall market performance being acceptable. However, new orders were limited, and end-user demand showed no clear recovery. By the end of March, net capacity had been reduced by 20.5 million tons, leading to some supply improvement. Producer inventories decreased slightly month-on-month but remained at historically high levels, indicating continued destocking pressure. Production in April is expected to remain manageable, with a relatively stable supply-demand balance anticipated. Expectations for increased production line ignitions in May and June, combined with persistent challenges in demand improvement, suggest market conditions may weaken, leading to stable or slightly declining float glass prices in the near term.
Risks include significant fluctuations in raw material prices, weaker-than-expected downstream demand, higher-than-anticipated new industry capacity, and delays in policy implementation.
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