A new wave of demand for quartz sand is coming

In 2020, the glass price showed a "V"-shaped reversal trend during the year. Under the influence of the overall epidemic situation in the first half of the year, the Chinese national demand for glass continued to decline. However, after the resumption of work in April, the overall glass demand broke out during the completion cycle. Glass futures Prices bottomed out like a roller coaster.
Looking forward to 2021, the macroeconomic situation is still in a positive trend for the world's epidemic recovery. The overall supply of glass will have a 4-5% year-on-year increase in the guarantee of high profits. At the same time, the demand will continue to increase with the increase in the completion of real estate, the increase in the window area of commercial housing and the increase in the penetration rate of double and triple glass. There is support.

The photovoltaic glass industry will add 17,200 tons of new capacity in 2021

Morgan Stanley issued a report stating that the photovoltaic glass industry will add 17,200 tons of new production capacity next year. However, with the recovery of the world and the carbon neutral target set by the world government, the demand for photovoltaic glass will increase greatly at the same time. Therefore, photovoltaic glass is expected to increase next year and the supply will still be tight.

It is expected that the price of photovoltaic glass will adjust with the supply, which will put pressure on the gross profit margin of manufacturers. As leading companies, Xinyi Solar and Flat Glass together account for 50% of the market share. They continue to benefit from economies of scale, high product defect-free rates and more advanced technology.

Float glass production capacity is expected to increase by 3.55% in 2021

A comparison between the average price of float glass and the production capacity data from 2015 to 2020 shows that the correlation coefficient between the two is 0.7, which has a certain positive correlation.

From 2015 to 2020, Chinese domestic float glass production capacity showed a fluctuating upward trend. Under the guidance of supply-side reform policies in 2015-2017, coupled with strict environmental protection policies in some regions, Chinese domestic float glass production capacity has been gradually reduced. However, as the market improves after 2018, new production capacity has been put into production one after another, especially the continuous rise of spot prices in 2020, which has stimulated the enthusiasm of production enterprises to invest in production capacity. In the year 2018, there are 13 new production lines set. The domestic float glass production capacity reached the highest point in recent years at 58.75 million tons at the end of 2020.

It is estimated that 9 new production lines will be put into operation in 2021, with a total daily melting capacity of 6,950 tons, an increase of 3.55% from the end of 2020.

In 2020, the market demand for float glass declined first and then rised. With the resumption of production and work in the second quarter, the improvement of market consumer demand has been effective and the growth rate of cumulative meter demand continued to improve. According to statistics, seven of the eight months since May must be in the positive range. In particular, driven by the catch-up period in the fourth quarter, the industry's annual cumulative table needs to be turned positive, and the market has experienced a phenomenon that supply exceeds demand.

The cumulative year-on-year growth rate of the 2020 table needs has been revised, which fully illustrates the current toughness of market demand. According to the linear extrapolation of the data, the expected growth rate of table demand in 2021 may reach the level of 5-7%.

Increased demand for display glass substrates

Although the demand for electronic products in 2020 is still negative compared with 2019, the demand for liquid crystal area is becoming positive year-on-year. The doubling of demand for display glass substrates has promoted the increase in area demand. Due to the outbreak of the COVID-19 epidemic, the demand for display panel area in the second quarter of 2020 is expected to be negative year-on-year. However, according to Omdia's analysis, there will be strong demand for display devices in the third and fourth quarters of 2020. In addition, Omdia also predicts that the area demand in 2021 will be positive year-on-year. By 2021, the demand for display materials should be quite strong.

It is expected that there will be another tight supply in the second and third quarters of 2021. It will take two years for the new glass substrate melting furnace to be used for mass production. In 2021, major glass substrate manufacturers may repair their glass substrate production capacity. In 2021, display glass substrates will continue to be in short supply.

Quartz sand, as the most used raw material in glass production, will inevitably increase in demand. In fact, it is not only the glass industry that drives the demand for quartz sand, but China's semiconductor industry also needs a breakthrough in 2021, which will also promote the long-term demand for quartz sand.

Prominer has been devoted to the development of quartz/silica processing technology and plant solution development for many years, and has various experience in quartz/silica sand processing. Prominer can also provide EPC services to such project.

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