China Galaxy Securities released a research report stating that the effects of capacity reduction are expected to become apparent by 2026, with expectations for improved industry supply-demand dynamics strengthening. Prices are anticipated to see marginal increases, and corporate profits are expected to gradually recover. Furthermore, leading cement companies are accelerating their overseas capacity布局, which will contribute additional performance growth and widen the profit gap among industry leaders.

The development momentum in downstream emerging industries for fiberglass remains favorable. Driven by AI computing demand, specialty fiberglass yarn continues to experience high prosperity. The conversion of traditional electronic yarn/fabric capacity has led to tight supply and demand, pushing prices higher and further benefiting corporate profit recovery. Fiberglass enterprises with relevant capacity布局 can expect promising profits.

Urban renewal initiatives are driving demand for consumer building materials in the renovation and repair markets. Consumption upgrades will boost demand for high-quality, green building materials. Leading companies with advantages in channel布局 and brand strength are expected to continue consolidating their market positions. Recent raw material price increases support the repricing of consumer building material products, and the profits of leading enterprises are expected to gradually improve.

China Galaxy Securities' main views are as follows:

**Cement: April demand improved sequentially, but price restoration fell short of expectations.** Seasonal factors led to a sequential improvement in cement demand in April, but rainy weather in some southern provinces constrained demand. The national clinker production line shutdown rate in April was lower than in March. Northern provinces implemented routine staggered production shutdowns in April-May, but enforcement was not stringent. Most southern provinces adopted flexible staggered production in the second quarter. National clinker inventory shifted from decline to increase. Cement companies across regions attempted tentative price hikes to varying degrees in April, but the effectiveness of these price restorations was below expectations, leading to a sequential decline in the national average cement price. Looking ahead, some cement companies may continue attempts to raise prices in May. However, due to weak demand and inventory pressure, the implementation of price increases is expected to have limited effect, and cement prices may continue to see slight declines.

**Fiberglass: Differentiated price increases for coarse yarn; electronic yarn prices continue to rise.** For coarse yarn, demand for mid-to-high-end products saw some volume in April, with overall demand performance being acceptable. A new production line ignited in late April but has not yet officially commenced operations, keeping the relatively limited supply tight. Coarse yarn market prices continued to rise in April, with increases for traditional thermosetting, high-end thermoplastic, and wind power products. New prices from various manufacturers were gradually implemented during the month. Looking forward, structural demand differences for coarse yarn are expected to persist, with mid-to-high-end product demand performing well. The short-term market is expected to focus on digesting social inventory, with prices overall stabilizing.

For electronic yarn, prices continued to increase in April. High-end products maintained the significant price gains seen previously. With supply remaining tight, acceptance of new prices among midstream and downstream players was acceptable. In the short term, the tight supply issue for various specifications of electronic fabric is expected to be difficult to resolve effectively. Although a few newly ignited production lines have recently begun operations, slightly alleviating the tight supply of traditional thick electronic fabric and G75 electronic yarn, persistently low enterprise inventories and sustained rigid demand suggest further price increases are anticipated.

**Consumer Building Materials: Raw material price hikes drive company price increases, profits expected to see marginal recovery.** Retail sales of building and decoration materials in the first quarter of 2026 decreased by 4.7% year-on-year, with the decline widening by 2.5 percentage points compared to January-February. March alone saw a year-on-year decrease of 9% in retail sales. The first quarter is typically a low season for home decoration, compounded by continued weakness in real estate sales, leading to a year-on-year decline in demand for consumer building materials in the home decoration market. Short-term demand in the home decoration market is expected to see marginal improvement in the second quarter. Medium to long-term, the continued implementation of urban renewal strategies will release demand for repairs and renovations. The advancement of the "Good House" construction standards will increase the market penetration rate of high-quality green building materials. Leading consumer building material companies with advantages in product quality and environmentally friendly production technology are poised to benefit. Recently, due to rising raw material costs, several leading consumer building material companies have issued price increase notices. Coupled with catalysts from "anti-involution" policies, the profits of leading enterprises are expected to recover.

**Float Glass: April prices slightly declined; short-term inventory accumulation may suppress prices.** Market rigid demand remained weak in April, with downstream processors facing insufficient orders. Processor operating rates stayed low throughout the month. Overall capacity supply remained stable, but enterprise inventories saw a slight sequential increase, leading to significant destocking pressure. The average price of float glass declined slightly in April. Looking ahead, market supply and demand pressures are expected to persist in May. On one hand, capacity and production are expected to increase; on the other hand, expectations for an improvement in rigid demand are insufficient, keeping overall market pressure high. Inventory pressure for float glass manufacturers is expected to continue increasing in May, dragging on prices.

**Risk Warning:** Risk of significant fluctuations in raw material prices; risk of downstream demand falling short of expectations; risk of industry新增产能 exceeding expectations; risk of policy implementation falling short of expectations.