In October, the domestic glass spot market is mainly focused on structural adjustments. Last week, the daily melting volume of glass further decreased to 159,700 tons. According to Longzhong Information, as of the week ending October 31, 2024, the daily melting volume of glass decreased by 2.27%, a year-on-year decline of 40 percentage points. The contraction on the supply side of glass is still ongoing.

　　According to Lu Jiaming, a senior analyst in energy and chemical futures at Shenwan Hongyuan, since October, the daily melting volume of glass has maintained around 162,500 tons for a period of time. Considering that October is a peak consumption season, supply and demand can still be balanced. However, as time goes on, whether there is a need for further adjustments on the supply side is the focus of the market.

　　Industry insiders believe that the further decline in daily melting volume last week is, to some extent, a rehearsal for future supply and demand results. Meanwhile, the main futures contract 2501 briefly surged to 1,425 yuan/ton in October, before turning back down.

　　"With the cooling of speculative trading, the focus of the futures market in November has shifted to the actual supply and demand situation." Lu Jiaming believes that the underlying reason is that the current spot prices are lower than the futures market, and last week, spot prices tentatively increased against the backdrop of supply contraction and inventory decline, but the futures market performed worse than the spot.

　　In Lu Jiaming's view, the core of the glass market lies in reasonable valuation under the recovery of demand. He stated that with the contraction on the supply side and the boost from policies, the short-term supply and demand pattern of the float glass industry has somewhat recovered, and last week, the inventory of glass enterprises decreased to 45.88 million heavy boxes.

　　In this regard, Wei Zhaoming, an analyst at Founder Zhongqi Futures, stated that the significant decrease in inventory of float glass enterprises over the past month is influenced by multiple factors, the most important of which is the rise in the market, with active performance from spot and futures traders, resonating with the restocking behavior of downstream traders and processing plants, which has boosted spot sales.

　　He stated that since October, the glass market has seen a boom in production and sales, with downstream traders and futures traders restocking, leading to the depletion of inventory at original sheet enterprises, and spot prices have risen across the country, with glass ex-factory prices cumulatively increasing by 300 yuan/ton from the low point in late September.

　　"In fact, these have already been reflected in the spot prices of glass in Hebei and Central China." Lu Jiaming said, however, how the actual demand for glass will be this autumn and winter is still unknown. After all, whether glass consumption in December can be better than in October, and whether spot prices can be higher than in October, still has considerable uncertainty, pending further market verification.

　　Entering November, the glass futures market needs to grasp the change in driving logic, and the market will focus on the degree of improvement in the short-term fundamentals, the most intuitive being to observe the situation of downstream terminal demand.

　　"From the perspective of order days for deep processing enterprises, there was an increase in deep processing orders before the National Day holiday, partly due to the natural growth in demand during the 'Golden September and Silver October'; another part is that the rise in original sheet prices has prompted a concentrated release of deep processing orders." Wei Zhaoming believes that based on the absolute value and change trend of deep processing order days, the space for further increase in glass demand is limited, and that deep processing orders will seasonally decline around the end of November, indicating an increased risk of a downturn in glass demand.

　　Based on this, Lu Jiaming believes that in the future market, attention should be paid to changes in spot prices, changes in basis, and changes in the price difference between near and far month futures contracts, as these will provide useful assistance in grasping the reasonable valuation of glass.

　　"The glass market is based on the game between expectations and reality, and is expected to continue a wide fluctuation trend in the short term." Wei Zhaoming added that terminal demand is relatively weak before and after the Spring Festival, and the probability of the glass futures 2501 contract being under pressure to decline is relatively high. "In the long term, the price trend of glass is expected to follow the macro environment and trend positively." he said.