[SMM Analysis] Indonesian Quartz Sand Emerges as Key Link in China’s PV Glass Supply Chain

In recent years, the PV industry has entered a period of deep adjustment, with module prices continuing to decline, and both upstream and downstream segments of the industry chain facing severe profit compression. Driven by the imperative of "extreme cost reduction," PV glass, a key auxiliary material for PV modules, has imposed increasingly stringent requirements on the cost and quality of upstream raw materials. Among these, ultra-clear low-iron quartz sand, which determines the light transmittance of PV glass, has become a critical node in the restructuring of the supply chain. As domestic high-quality mineral resources are gradually depleted and comprehensive mining costs rise, Chinese PV glass enterprises have firmly set their sights on Indonesia, which possesses advantages in resource endowment. Currently, supply-demand interactions between China and Indonesia in the field of quartz sand for PV glass have become extremely close.

To more clearly illustrate the actual positioning of Indonesian quartz sand within China's PV supply chain, we conducted an in-depth analysis of core data and industrial logic based on publicly available information and market surveys:

Q1: In which sectors is quartz sand exported from Indonesia primarily used in China?

Almost all (about 96%) of the quartz sand exported from Indonesia is shipped to China. Of this quartz sand imported by China, a significant proportion (60% to 70%) is used in the production of PV glass. Additionally, due to the cost advantages of Indonesian sea sand when mined near ports, a portion is also utilized domestically in the production of float glass or ultra-clear glass. However, because of the lack of corresponding vein resources locally, Indonesian quartz sand cannot meet the high-purity requirements needed for crucible production. Moreover, Indonesian quartz sand is primarily sea sand, and due to its morphological characteristics, it is generally unsuitable for producing silicon metal.

Q2: What are the specific quality requirements for quartz sand used in PV glass?

Ultra-clear low-iron quartz sand for PV glass has extremely strict limits on purity and impurities:

• Silicon content: Typically must be above 99.3%.
• Iron content: This is the most critical indicator, usually requiring an iron content of less than 120 PPM.
• Minor metal indicators: Besides silicon and iron, the content of other minor metals in the quartz sand is also crucial. Chinese purchasers typically need to strictly screen and evaluate against specific minor metal content procurement standards set by glass enterprises.

Q3: What is the volume of Indonesian quartz sand used by China's PV glass industry and the degree of import dependence?

Currently, Indonesia and Turkey are the main sources of China's quartz sand imports. According to public data, Indonesian quartz sand accounts for approximately 50% to 60% of China's total quartz sand imports. The total annual volume of quartz sand exported from Indonesia to China ranges between 4 million and 5 million mt. Based on the calculation that producing 1 mt of PV glass consumes approximately 0.7 to 0.8 mt of quartz sand, about 15% to 20% of the total quartz sand consumed in China's PV glass manufacturing is directly dependent on imports from Indonesia.
 

Q4: Is Indonesian quartz sand irreplaceable in Southeast Asia?

Considering multiple dimensions such as transportation distance, procurement price, and inherent quality, Indonesian quartz sand indeed holds significant priority and strong irreplaceability in Southeast Asia. Within the Southeast Asian region, the quality of Indonesian quartz sand currently ranks first, followed by Malaysia, while Vietnam's quality is relatively weaker. Although ore quality from more distant regions such as Africa may be superior, within the scope of convenient maritime transport in and around Southeast Asia, Indonesian quartz sand currently offers the most outstanding combination of cost-effectiveness and quality advantages.

Q5: What are the current pricing models and market price levels for Indonesian quartz sand?

Currently, Indonesian quartz sand has not yet established an absolutely unified pricing standard, but relevant local industries are actively promoting the establishment of unified FOB (Free on Board) and CIF (Cost, Insurance, and Freight) guidance prices, with the expectation of forming official guidance prices in the future. Last year, the ex-factory FOB price for a certain Indonesian sea sand plant was approximately 160 yuan/mt (excluding freight), while the CIF price upon arrival in China was around 330 to 340 yuan/mt. Compared to ordinary construction sand, which costs only slightly over 100 yuan/mt, the price of industrial-grade refined sand for PV and float glass typically remains stable at a high level above 300 yuan. Currently, domestic glass enterprises, when making purchases, generally prefer to negotiate annual long-term contracts directly with large suppliers based on prevailing market conditions.