Caitong Securities: Supply-Demand Imbalance Persists in Glass and Fiberglass Sector, Strong Demand for Low-Dielectric Products

Caitong Securities released a research report indicating that the float glass industry continues to face a significant supply-demand imbalance. Prices are expected to fluctuate around the bottom range until new coordinated policies or large-scale cold repairs are implemented.

On the supply side, although major companies issued price hike notices in early November, some previous orders remain outstanding. Coupled with subdued downstream demand, the traditional roving market still shows evident supply-demand tensions.

In November, domestic electronic yarn prices remained largely stable. For high-end products, short-term demand remains robust, with supply gaps persisting for first- and second-generation low-dielectric materials. The Low-CTE market also faces a substantial shortage, suggesting high-end product prices will likely maintain an upward trend in the near term.

Key insights from Caitong Securities: 1. **Float Glass**: Industry data shows the average domestic float glass price this week was RMB 1,151.40/ton, down 1.17% week-on-week. Demand remains weak due to an unstable property market and colder weather reducing northern demand. Despite overall losses, sufficient cash flow from 2023–2024 profits may keep production lines running. With 265 float glass lines (217 operational) and 84.10% capacity utilization, prices may stay range-bound until policy adjustments or cold repairs.

2. **Fiberglass**: The average price of 2400tex alkali-free roving held steady at RMB 3,535.25/ton on December 18. Post-wind power installation rush by 2025, demand may contract slightly, while thermoplastics demand could grow with lightweight EVs and appliance efficiency upgrades. Despite November price hikes, excess capacity and weak downstream demand sustain the imbalance.

3. **Electronic Yarn**: Prices were stable in November as downstream CCL markets followed demand-driven procurement. High-end products, particularly low-dielectric and Low-CTE materials, face shortages, supporting price increases.

**Investment Recommendations**: - **Cement**: High-dividend defensive plays with potential bottoming prices. Recommended: Anhui Conch Cement (600585.SH), Huaxin Cement (600801.SH); monitor Shangfeng Cement (000672.SZ) and Tianshan Materials (000877.SZ). - **Building Materials**: Policy support and operational improvements may drive recovery. Key picks: 3Trees (603737.SH), Tubaobao (002043.SZ), Oriental Yuhong (002271.SZ), and Keshun Waterproof (300737.SZ).

**Risks**: Policy delays, weaker-than-expected demand, or subpar product yields.