Module scheduled production decline accelerates, with a significant drop in new single-glass module quotes in June [SMM Analysis]

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SMM News on June 5:

The current glass quotes for June are as follows: 2.0mm single-layer coating (12-12.5 yuan/m²); 2.0mm double-layer coating (13-13.5 yuan/m²); 3.2mm single-layer coating (20-21 yuan/m²); 3.2mm double-layer coating (21-22 yuan/m²); 2.0mm back glass (11-12 yuan/m²). As of now, glass quotes in the June market have been significantly reduced, down by 1.5 yuan/m² compared to the same period in May. The intended transaction price has decreased by 1 yuan/m² compared to the same period in May, and the actual price has fallen by approximately 1 yuan/m².

Figure: PV Glass Price Trend

Data source: SMM

The current decline in PV glass prices has sparked strong resistance among multiple glass enterprises. Moreover, the current low market prices have not yet reached the intended purchase prices of module enterprises. It is expected that module enterprises will continue to exert strong pressure during the subsequent negotiation period. The significant decline in module scheduled production has played a supportive role in suppressing sentiment. According to SMM statistics, domestic module production in May was less than 48GW. End-use demand has been continuously declining recently, and there is limited support for subsequent demand. Module production is expected to continue to decline in June, with domestic module production projected to fall below 45GW. In contrast, glass supply has increased. With the release of additional production from newly started kilns in the early stage, domestic glass production in May rose to over 48GW, leading to an accumulation of inventory at glass enterprises in May. Glass supply in June is expected to rise to around 49GW. Meanwhile, overseas supply has also shown a slight upward trend recently, resulting in a global PV glass supply surplus. Additionally, a contributing factor is the slight drop in the price of sodium pyroantimonate, a glass clarifying agent, which has fallen to 105,500 yuan/mt this week, slightly loosening cost support. Therefore, under the interplay of the aforementioned multiple factors, glass prices have fallen.

Regarding price forecasts for the subsequent period in June, SMM believes that in the first half of June, domestic mainstream transaction prices are expected to hover around 12 yuan/m². However, with the subsequent reduction in demand and the expected accumulation of inventory, glass prices are expected to continue to fall by month-end, with local transaction prices expected to break through the cost line of glass.