In the coming two years, the glass industry enjoys a clear and favorable prospect, not excepting the undersupplied situation of glass in 2008. At present, Several Suggestions on Promoting the Regulation of Plate Glass Industry has been issued by the State Development and Reform Commission together with the other six ministries and commissions, which mainly focuses on two aspects: first, control the newly-added production capacity of glass industry; second, promote the structural regulation of the glass industry. It shall increase the further processing ratio of the glass and the added value of the glass products. Any regulation and control policy newly issued at this moment will further decrease newly-added production capacity of the glass in future. Under the circumstances that the demand maintains the growth rate at 12-15% while the capacity flexibility is extremely small, undersupplied situation of the glass industry in the next year is not eliminated. Meanwhile, fall of the heavy oil price will also become substantially favorable to the glass.

Under the circumstance that the trend of the glass price in the off season is obviously stronger than the expectation, it is estimated that the industrial profit will be strongly reversed in the first quarter. Meanwhile, the structural regulation will change the current status of obvious influence imposed by the fluctuation of industrial profit on the profit of further-processing enterprises. The improvement of further-processing ratio will change the severe homogeneity of the products in the plate glass industry, ultimately leading to the result that market competitiveness of the company in float glass industry will depend on the market share of the company in further-processing industry.

Leadership and M&A remain the two major investment themes in the glass industry. In the year of 2007, some major investment opportunities will also exist in some leading companies with strong integrated comprehensive strength and the concept and substance of energy-conservation.

Source: Daily News