Glass Prices Rise and Market Optimism Spurs the Start of the Second Round of Furnace Restarts! [SMM Analysis]

SMM March 4 News: As of March, the actual transaction prices for new orders in March from glass enterprises have not been fully finalised. This month, PV module manufacturers have shown a strong desire to bargain down prices. Top-tier enterprises are still negotiating, attempting to slightly lower prices. Glass enterprises have made minor concessions on their quoted prices. The transaction prices for orders completed so far in March mostly range between 13.5-14 yuan/m². With the anticipated market improvement materialising, domestic blocked kilns have recently restarted, and the second wave of kiln resumptions in the industry has fully commenced!
As of now, the mainstream transaction prices for 2.0mm PV glass are 13.5-14 yuan/m², and for 3.2mm PV glass, they are 22-22.5 yuan/m². Prices reflect a slight concession of 0.5 yuan/m² compared to quoted prices. The primary reason for this concession is the lack of significant price increases in PV modules, leading to strong resistance to rising raw material costs, including glass.

Figure: PV Glass Price Trends

Data Source: SMM

Supply side, with the rise in glass prices, the first batch of blocked kiln capacity in China resumed production in February, resulting in total industry glass production exceeding expectations by approximately 5%. In March, due to a significant increase in production days combined with the upcoming restart of the second batch of kilns, SMM recorded that the capacity of the second batch of resumed kilns is close to 4,000 mt/day. Additionally, there are plans for new kiln startups and cold repair kiln resumptions within the month. Therefore, the March glass production schedule is expected to increase significantly, with the operating rate up 13.77% MoM from February.

Figure: PV Glass Production Trends

Data Source: SMM

In summary, SMM expects the planned production of PV glass to continue increasing. The improving market conditions are encouraging blocked kiln enterprises to resume production. Currently, nearly 6,000 mt/day of kiln capacity remains blocked, and there are still many expectations for new kiln startups to release capacity this year, indicating a rapid growth trend in glass supply.