On February 27th, according to the "Transaction Reality" report from the Voice of Economics, Zhao Hong, a non-metallic building materials industry analyst at Shanxi Securities, was interviewed to discuss investment opportunities in the glass sector. Zhao noted that the current demand growth in the glass industry is relatively slow.
From a supply perspective, is the glass industry still facing overcapacity?
Zhao Hong explained that yes, it is. When assessing whether an industry has excess capacity, one can refer to the capacity profit margin or equipment profit margin indicators used in developed countries. A normal range is between 79% and 85%. If the profit margin exceeds 90%, it indicates strong demand and insufficient supply. However, if it falls below 79%, it signals a surplus. In China, from 2000 to 2012, the glass industry's capacity profit margin only exceeded 80% in three years—2000, 2003, and 2011. In other years, it remained mostly below 75%, indicating a serious overcapacity issue.
The main cause of this surplus is the rapid increase in production capacity over the past few years. Over the last ten years, the industry’s capacity has grown by about 15% annually. Last year, despite weak overall demand, production capacity still increased by more than 8%. This imbalance has led to low profit margins and an increasingly severe overcapacity problem.
How long would it take for this overcapacity to be resolved under normal conditions?
Zhao Hong said it depends on the growth rate of demand from downstream industries. Last year, demand even declined, but that didn’t help reduce the surplus. Looking ahead, he expects demand to grow at a low pace, which means the overcapacity issue may persist for some time.
Drywall Self Drilling Screws,Self drilling tapping screw,Black screws ,black drywall screw
HANDAN ZHONGBAO IMPORT AND EXPORT TRADING CO.,LTD , https://www.hdzbfastener.com