China Galaxy Securities released a research report indicating that the effects of capacity reduction in the cement industry are expected to become apparent by 2026. Anticipation for improved industry supply-demand dynamics is strengthening, which may lead to price recoveries and a gradual restoration of corporate profits. Furthermore, leading cement enterprises are accelerating their overseas production capacity布局, which is projected to contribute additional performance growth and widen the profit gap between industry leaders. Downstream emerging industries are showing favorable development momentum. Driven by AI computing demand, the high prosperity in specialty glass fiber yarn is expected to persist, with leading glass fiber companies possessing relevant capacity layouts likely to see promising profits. Urban renewal initiatives are driving the release of demand for consumer building materials in renovation and repair markets. Consumption upgrades will boost demand for high-quality, green building materials, allowing leading companies with advantages in channel distribution and brand strength to continually solidify their market positions. Expectations for improvement in terminal demand for glass remain weak, while "anti-involution" policies are anticipated to accelerate optimization on the glass supply side. The main views of China Galaxy Securities are as follows:
Cement: Seasonal Off-Peak Period, Weak Supply-Demand, Prices Under Pressure January falls within a seasonal off-peak period, with total national cement demand decreasing. Northern regions implemented staggered winter kiln shutdowns, while southern regions adopted flexible staggered production in the first quarter, leading to a gradual reduction in national clinker inventory and some easing of inventory pressure. However, due to oversupply and weak demand, tentative price increases in some regions were not implemented as expected, resulting in a month-on-month decline in the national average cement price for January. Looking ahead, market supply and demand are expected to remain stagnant in February due to the Spring Festival holiday, with short-term prices likely staying stable. As spring construction commences in March, cement market demand is anticipated to recover, with expectations for price increases.
Glass Fiber: Coarse Yarn Prices Stable in January, Tight Supply of Electronic Yarn Drives Price Hikes For coarse yarn, demand slightly declined in the first half of January but improved in the latter half due to rush-work demand and minor stockpiling, leading to reasonable shipment levels. As previously idled production lines gradually resumed operation, coarse yarn supply increased slightly. Coarse yarn prices remained stable throughout January. Short-term demand is expected to be limited, but with rising costs for tank furnace plants, there is strong intent to raise prices after the holiday. Coarse yarn prices are forecasted to be stable with a potential upward trend. For electronic yarn, the high prosperity of specialty glass fiber products continued in January. Due to overall industry supply structure adjustments, with traditional electronic yarn capacity being converted to other products, traditional electronic yarn and electronic cloth supply-demand conditions became tight, leading to small price increases. Strong demand supports high-end products, but limited supply is expected to keep short-term prices on an upward trend. Demand for traditional electronic yarn may see periodic declines, but structural supply tightness could lead to small, stable price increases.
Consumer Building Materials: High-Quality Existing Market Supports Demand, Price Hikes Drive Profit Recovery In 2025, retail sales of building and decoration materials decreased by 2.7% year-on-year. December alone saw retail sales of 171.7 billion yuan, down 11.8% year-on-year but up 15.0% month-on-month. Year-end rush work led to a marginal slight recovery in home decoration demand. However, overall demand for consumer building materials lagged behind previous years due to a significant reduction in new home demand in 2025. The continued implementation of urban renewal strategies is expected to release demand for repairs and renovations. The promotion of "good house" construction standards will increase the market penetration rate of high-quality green building materials. Recently, several leading consumer building material companies have issued price increase notices. Coupled with catalysts from "anti-involution" policies, profits for leading enterprises are expected to recover.
Float Glass: Supply-Demand Structure Expected to Weaken, Price Center to Shift Downward In January, fundamental demand for float glass weakened further, while speculative demand increased, boosting purchasing enthusiasm among midstream and downstream players. National float glass capacity continued to shrink in January, and reduced supply led to a gradual decline in corporate inventory. However, inventory transfers accounted for a significant portion, and overall social inventory levels remained high. The average price of float glass continued to weaken in January. Looking forward, short-term demand is expected to continue shrinking, with post-holiday inventory remaining high. Under supply-demand pressure, the price center is forecasted to move downward.
Risk Warning Risks include significant fluctuations in raw material prices; downstream demand falling short of expectations; industry新增 capacity exceeding expectations; and policy implementation falling short of expectations.
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