The sentiment of hoarding modules has stimulated the recovery of glass trading volume, providing a basis for price increases [SMM analysis]

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SMM News on July 17:

The current glass quotes for July are as follows: 2.0mm single-layer coating quote (10.0-10.5 yuan/m²); 2.0mm double-layer coating quote (11.0-11.5 yuan/m²); 3.2mm single-layer coating quote (17.0-18.0 yuan/m²); 3.2mm double-layer coating quote (18.0-19.0 yuan/m²); 2.0mm back glass quote (10.2-10.8 yuan/m²). As of now, glass quotes in the July market have fallen significantly compared to the same period in June. However, recently, due to module enterprises entering the market early to stock up on procurement, glass prices have stopped falling and laid the foundation for subsequent price increases.

Figure: PV Glass Price Trend

Data Source: SMM

The mainstream transaction center in the July market is still declining. As of now, the mainstream transaction benchmark price has dropped to around 10 yuan/m², and the minimum agreed price for some enterprises has dropped to around 9.5 yuan/m², breaking historical lows again. Under this background, glass enterprises are facing unprecedented cost pressure. In July, top-tier enterprises also began cold repair shutdowns, and the overall production cuts in July were relatively fast. With the influence of low prices and subsequent module price increases, coupled with multiple factors such as the rebound in planned module production in September, module enterprises have started to stock up at low points. Starting from last week, some third-tier module enterprises in China have begun to enter the market for increased procurement. This week, top-tier module enterprises in China will also enter the market for procurement and stockpiling. According to incomplete statistics from SMM, it is expected that this round of stockpiling volume may approach 10GW. Recently, the glass inventory level has begun to stabilize, and subsequent glass inventory will also decline.

Regarding price forecasts for the rest of July, SMM believes that in the latter half of July, the domestic mainstream transaction prices are expected to remain stable, with increasing difficulty in further declines. Regarding price forecasts for August, influenced by the increase in module procurement volume and the acceleration of production cuts on the supply side, SMM optimistically predicts that the mainstream transaction center may rise slightly.