PV glass furnace shutdowns are rapidly increasing. Is there a change in domestic supply performance? [SMM Analysis]

As of July 18, SMM reported that domestic glass prices fell in July. The current prices for new glass orders are as follows: 2.0mm single-layer coated (14.5-15.5 yuan/square meter); 2.0mm double-layer coated (15.5-16.5 yuan/square meter); 3.2mm single-layer coated (24.0-25.0 yuan/square meter); 3.2mm double-layer coated (25.0-26.0 yuan/square meter). In July, domestic PV glass prices fell again by 0.5 yuan/square meter. The number of cold repair production lines increased in July, with a cold repair capacity of 3,500 mt/day.

Supply side, in July, a new kiln with a capacity of 1,200 mt/day was ignited domestically. Six kilns underwent cold repair in July, with a total capacity of 3,500 mt/day. Among them, five kilns in Anhui underwent cold repair, with a capacity of 2,900 mt/day, and one kiln in Zhejiang underwent cold repair, with a capacity of 600 mt/day. According to SMM, the main reason for this concentrated cold repair of production lines was the age of the kilns, with market impact being a secondary factor. It is expected that the capacity of kilns undergoing cold repair will gradually increase, mostly for kilns ignited around 2017, with single-line kiln capacities all lower than 1,000 mt/day.

In terms of prices, although the number of kilns undergoing cold repair has gradually increased recently, demand remains sluggish. The supply-demand pattern of supply exceeding demand has not changed, and prices still face the risk of decline. However, due to the strong destocking willingness of glass producers in July, the price decline has been significant, and current prices have fallen below the cost line of some producers. There is support for further price declines, but the extent of the decline is expected to be limited.