Module Enterprises Exert Strong Pressure: Price Negotiation for New Glass Orders Falls Short of Quotation Expectations [SMM Analysis]

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SMM News on May 9:

The current glass quotations for May are as follows: 2.0mm single-layer coating (13.0-14.0 yuan/m²); 2.0mm double-layer coating (14.0-15.0 yuan/m²); 3.2mm single-layer coating (21.5-22.0 yuan/m²); 3.2mm double-layer coating (22.5-23.0 yuan/m²); 2.0mm back glass (12.0-13.0 yuan/m²). As of now, there have been no large-scale transactions in the May market, with most upstream and downstream enterprises still in negotiations. Due to the decline in module prices and demand, module enterprises have a strong desire to drive down prices this month. This week, the mainstream quotation for 2.0mm single-layer coated PV glass in the market has been adjusted down to 13.5 yuan/m², with low-end quotations dropping to 13 yuan/m².

Figure: PV Glass Price Trend

Data Source: SMM

SMM has identified two main reasons for the easing of quotations. Firstly, there is pressure from the demand side. Over the past month, module prices have continued to fall, with monthly declines exceeding 0.04 yuan/W for both centralized and distributed modules, and the decline being even more pronounced for distributed modules. Meanwhile, the planned production of modules in May has also started to decline due to the installation rush. Affected by the decline in module production schedules and prices, module enterprises have a strong sentiment to drive down prices for new glass orders this month. Secondly, glass supply has begun to increase, with additional production capacity coming online in China at the end of April. There is an expected risk of surplus in glass supply in Q3. Given the relatively favorable profit margins for glass enterprises, they have begun to implement a strategy of appropriate price concessions to boost sales. The combination of these two factors has led to a downward adjustment in quotations for new glass orders.

Regarding the price forecast for subsequent new orders in May, SMM believes that for 2.0mm single-layer coated PV glass, the mainstream transaction price range is expected to be 13-13.5 yuan/m². Some negotiated prices with leading module manufacturers may even fall below 13 yuan/m², but even if they do, the order volume will be limited. Additionally, as glass enterprise costs begin to receive some support, the extent of subsequent price declines will narrow.