December Glass Furnace Cold Repairs Fall Short of Expectations, Industry Production Slightly Decreases by 0.51% [SMM Analysis]

SMM January 3 News: According to SMM statistics, domestic PV glass production in December decreased by 0.51% MoM and monthly production dropped by 10,400 mt compared to November. SMM found that the main reason for the production decrease was the significant reduction caused by kiln cold repairs in November. Additionally, some domestic glass companies experienced kiln blockages in December, leading to a further supply reduction. Although there was one additional production day in December, overall production slightly declined compared to November.

Domestic glass production schedules in January are expected to decline again, with an estimated decrease of approximately 6.21% and a YoY reduction of 18.28%. Currently, January glass production still shows a downward trend. According to SMM statistics, a total of 4,000 mt/day kilns in China are planned for cold repairs in January, of which 1,800 mt/day kilns are expected to undergo cold repairs soon. Production schedules are projected to drop to around 40 GW.

Figure PV Glass Production Trend

Data Source: SMM

Looking into December production in detail, there were fewer kiln cold repairs domestically, with only the Hubei region experiencing kiln cold repairs throughout the month. The cold repair period occurred at the end of December, having a limited impact on the month's production. The primary reason for the production decrease was the reduced output caused by the shutdown of kilns undergoing cold repairs in earlier periods. Additionally, there was a reduction of nearly 500 mt/day due to kiln blockages during the month, and some previously planned cold repairs were delayed to varying degrees, resulting in a slight overall production decline.

SMM analysis indicates that although the number of kiln cold repairs has been decreasing in recent months, there are still many planned cold repairs in the future. Long-term glass supply is expected to show a downward trend. After January, domestic operating kilns are projected to decrease to 80,000 mt/day, with the operating rate dropping to around 60%. However, due to blockages and other production line issues, the actual operating rate may fall to around 50%, leading to a significant reduction in supply. It is expected that after the Chinese New Year holiday, module demand may recover, but there will be a time lag for kilns to resume production. This could result in a temporary supply shortage of glass after the holiday, potentially driving up glass prices. As the market recovers, the willingness to start new kiln production is also expected to increase, with a recovery in supply anticipated.