[SMM analysis] Enthusiasm for new glass projects increased amid risk of supply shortage

The price of photovoltaic glass has increased slightly this week. As of now, the price of 2.0mm single-layer coated glass is 15.8-16.5 yuan/square meter, and the price of 3.2mm single-layer coated glass is 25.5-26.0 yuan/square meter, the mainstream transaction prices are 16.0 and 25.5 yuan/square meter respectively, and the price of 2.0mm products increased slightly. Recently, as purchasing volume increased significantly in March, glass inventories have been digested quickly. Glass companies have also appropriately increased product quotations, and the market transaction price has increased.

From the demand side, the demand for photovoltaic glass downstream modules has increased rapidly. The procurement volume of module companies has increased significantly than expected. Glass is in a continuous destocking period, and there is a risk of insufficient supply. As such, glass companies’ new projects plans have been advanced.

Although the current policy restrictions have greatly suppressed the new production plans of photovoltaic glass, the previous new production capacity had been delayed a lot. Due to the impact of the current peak season caused by the increase in module production schedule, some glass companies' willingness to commence new furnaces has increased. As of the end of March alone, the domestic planned new production capacity scheduled has reached 4,400 tons/day, exceeding the total from January to February, and the new production capacity scheduled for April has also reached 2,200 tons/day. SMM learned that the module production schedule in April will exceed 60GW. The current glass supply is tight and prices are expected to rise, and profits will also be restored, which greatly promotes the willingness of glass companies to commence new projects.