Electronic fabric has experienced four rounds of price increases since October 2025, with the most recent hike in early February reaching 0.5-0.6 yuan per meter, exceeding expectations in both timing and magnitude. On one hand, demand for AI-related products such as low-CTE fabrics, first-generation, and second-generation fabrics remains robust, with supply struggling to keep up in the short term, suggesting continued price increases. On the other hand, as industry capacity shifts toward AI-specific fiberglass, traditional electronic fabric faces supply constraints, compounded by shortages in weaving machinery, indicating that price hikes for conventional electronic fabric are likely to persist beyond expectations.
From a broader perspective, cement demand nationwide is gradually recovering post-Spring Festival. Prior to the holiday, the construction market remained weak, while infrastructure demand showed significant regional variation driven by policy initiatives, with the residential market demonstrating relative demand stability. Over the medium term, cement industry capacity is expected to decline under policies restricting overproduction, leading to substantially improved capacity utilization rates and enhanced profit flexibility.
The glass sector continues to face declining demand influenced by the property market. In the short term, order improvements during the traditional peak season have been modest, with intermediate inventories remaining relatively high. Ongoing supply-demand imbalances and limited improvement in downstream end-user demand suggest prices will likely remain volatile at low levels in the near term.
In the fiberglass segment, demand during the Spring Festival period was subdued, with most furnace operators focusing on collections while midstream and downstream procurement activity remained weak. On the supply side, China Jushi's Tongxiang Line 3 resumed operation in December after completing maintenance. The electronic yarn segment shows strong performance, driven by demand from the AI industry chain, with low-dielectric products experiencing both volume and price increases. Clear upgrades in first, second, and third-generation (Q fabric) product structures indicate potential explosive growth in industry demand alongside AI development, supporting optimism for sustained volume-price growth trends.
The construction materials sector has reached a profitability bottom, with prices having no further downward room after years of competition. Supported by anti-internal competition policies, the industry demonstrates strong momentum for price increases and profit recovery. Multiple categories including waterproofing, coatings, and gypsum boards have issued price increase notices throughout 2025, suggesting industry profits may have bottomed out, with expectations for improved profitability among leading enterprises in 2026.
Key risks include potential underperformance in anti-internal competition policy implementation and unexpected declines in property and infrastructure demand.