Will PV Glass Reduce Production? Latest Industry Operating Statistics [SMM Analysis]

As September arrives, domestic PV glass prices have fallen again. Against the backdrop of declining industry profits and weakening demand, the PV glass industry has entered a period of overall losses. Following the losses and a decrease in order volumes, some domestic glass companies have recently accelerated their entry into the cold repair period, and the reduction in kiln production has become more severe since August.

In September, domestic PV glass prices fell again. The price of 2.0mm single-layer coated glass has dropped to 12.5 yuan/square meter. Under the pressure of high inventory, it is expected that companies' willingness to offer discounts will only increase, and transaction prices are likely to decrease slightly. According to SMM cost calculations, the current glass industry has reached the stage of full industry loss in terms of total cost and is approaching the cash cost line of full industry loss. With the increasing scope of losses and no improvement in demand, the willingness to operate has begun to decline.

In August, two more kilns in China entered cold repair, with a combined capacity of 750 mt/day. Besides cold repairs, many companies started reducing kiln production in August.

In August, a total of 12 kilns in China began reducing production, with a total kiln capacity of 10,110 mt/day, accounting for about 9.59% of the total operating capacity. This resulted in a capacity reduction of 2,909 mt/day, and the expected supply reduction has increased.

Recently, there have been rumors in the glass market that glass companies will collectively enter a phase of cold repair and production reduction, leading to a 30% decrease in production. SMM has learned that there is no collective effect; most of the kilns reducing production belong to companies with relatively smaller total capacities. Major companies have fewer production reduction operations, and some of the major companies' cold repair capacities are planned for kilns reaching their normal cold repair stage. Additionally, the subsequent cold repair and production reduction kilns are limited. The supply in China in September is still slightly surplus, with limited impact. However, it is expected that with some companies' maintenance and production reductions, the domestic supply side will enter a recovery phase. During this phase, glass demand will also slightly increase due to year-end installations, and glass inventory will begin to decrease slightly.