China Galaxy Securities: "Golden September" demand marginally recovers, policies accelerate improvement in supply and demand for building materials

According to the report from China Galaxy Securities, the urban development is shifting towards improving quality and efficiency of existing stock. Leading companies in the consumer building materials industry, which have a well-established channel layout, good category expansion, product quality advantages, and brand advantages, are expected to benefit. The acceleration of "anti-involution" is optimizing supply in the cement industry, and the supply-demand contradiction is expected to ease, with expectations for cement prices to rise. Regional leading enterprises are likely to see profit recovery. Benefiting from the recovery of fiberglass demand driven by emerging markets, there are expectations for price increases in mid-to-high-end products, which will boost the performance of related companies. The supply-demand pattern in the glass industry is also expected to gradually improve.

The main points from China Galaxy Securities are as follows:

Cement: Marginal improvement in September demand, slight price rebound under active price increases by enterprises

In September, the demand in the cement market showed marginal improvement, with the operating load of cement mills increasing month-on-month; the intensity of staggered kiln shutdowns was strengthened, but its effectiveness in regulating industry supply gradually diminished; in most regions across the country, cement prices were tentatively pushed up, with a month-on-month increase of 1.80%. Looking ahead, it is expected that cement demand will continue to grow in the "Silver October," the intensity of clinker kiln shutdowns will persist, and there is an expectation of a slight increase in cement prices; as November enters the winter staggered execution phase, clinker inventory will gradually decrease to low levels, and cement prices are likely to see a phase of increase.

Consumer Building Materials: Expanded decline in retail sales, urban renewal and "good houses" support demand

From January to August 2025, retail sales of building and decoration materials increased by 1.8% year-on-year, with retail sales in August alone declining by 0.7% year-on-year and 1.19% month-on-month. August is a low season for the home decoration market, compounded by an expanded year-on-year decline in real estate sales area, which has impacted sales in the building materials home decoration market. Looking ahead, the continued implementation of urban renewal strategies will directly release demand for the renovation of urban villages and the transformation of dilapidated houses, while the promotion of "good house" construction standards will enhance the market penetration of high-quality green building materials.

Fiberglass: Demand shows recovery trend, price has upward expectations

In terms of roving, in late September, downstream stocking increased, and large pool kiln manufacturers benefited from product structure optimization, with strong demand support; the supply of roving slightly decreased, alleviating inventory pressure on enterprises; roving prices remained stable, with some mainstream manufacturers slightly raising prices for certain products. Looking ahead, from October to November, roving demand is expected to rebound driven by the rush for wind power installations, with prices expected to remain stable with a slight increase. In terms of electronic yarn, in September, CCL orders restored, boosting the demand for ordinary electronic yarn, while high-end electronic yarn continued to face supply shortages; during the month, electronic yarn prices remained stable and cautious. Looking ahead, the overall production and sales of ordinary electronic yarn are expected to improve, and the high prosperity of high-end products will continue, with expectations for electronic yarn prices to rise.

Float Glass: Demand has improved, prices are on the rise

In September, demand showed marginal recovery, with slow release of rigid demand, and some medium to large processing plants saw slight improvements in engineering orders, along with increased speculative demand; the capacity of ignited production lines was gradually released in August, leading to a slight increase in supply in September; under the collective price support from enterprises, float glass prices showed an upward trend in September. Looking ahead, year-end rush work is expected to drive further improvement in the float glass market demand, coupled with expectations of increased policy regulation on supply, float glass prices are likely to stabilize, but before there is a significant improvement in the overall supply-demand structure of the industry, prices are expected to improve slightly Risk Warning

The risk of significant fluctuations in raw material prices; the risk of downstream demand being lower than expected; the risk of new industry capacity exceeding expectations; the risk of policy advancement being slower than expected