Supply-Demand Inflection Point Emerges? PV Glass Sector Sees Collective Surge [SMM Analysis]

SMM, August 4:

Recently, shares of A-share and Hong Kong-listed PV glass producers have rallied, with the sector staging a notable rebound. Amid sustained pressure on the entire PV industry chain, PV glass has become the first segment to recover, with the rally driven by a confluence of factors including fundamental supply contraction and improving demand expectations.

Within the August new order negotiation cycle, most glass producers have uniformly raised their quotations to around 9.5 yuan/m², with some approaching 10 yuan/m², representing an increase of nearly 1-2 yuan/m² compared to the same period in July. Most firms expressed reluctance to sell at low prices and a willingness to jointly raise prices. For the first time after the halfway point of 2026, the PV glass industry has begun to rebound, and SMM believes this rebound has a fundamental foundation.

Figure: PV Glass Price Trend

Source: SMM

Previously, SMM indicated in multiple analytical articles that the core catalyst for this round of rally was the marginal improvement on the supply side. In H1 2026, the PV glass industry was mired in overcapacity, with previously front-loaded capacity continuously releasing, causing market prices to repeatedly breach the cost line and the industry to suffer widespread losses. Subsequently, starting from the end of March, firms began to cut or halt production to varying degrees due to the deteriorating operating environment. In June, top-tier players in China reached a self-discipline consensus, and from July initiated a new round of collective cold repairs of furnaces. Given the high cost of restarting after cold-repair shutdowns for PV glass, capacity withdrawal is quite rigid. As multiple thousand-tonne kilns enter maintenance, the industry’s effective supply has been continuously contracting.

Figure: PV Capacity Price Trend

Source: SMM

On the demand side, peak season expectations are heating up, and downstream purchase willingness is improving at the margin. Q3 has traditionally been the peak delivery season for PV in China, with downstream module producers’ scheduled production rebounding steadily MoM. In July, domestic module scheduled production rose 9.29% MoM, prompting producers to begin phased stockpiling and leading to an increase in just-in-time procurement of PV glass. At the same time, PV demand outside China is recovering at the margin, overseas module producers’ orders are steadily being released, and glass export orders are gradually improving.

Figure: PV Module Production Trend

Source: SMM

With the improvement in supply-demand conditions, days of inventories in the glass industry have begun to decline. Taking producers’ on-hand inventories (excluding dead stock) as an example, after another month of production cuts, days of inventories have dropped from a previous peak of nearly 47 days to around 40 days currently, also supporting the upward adjustment of August new order quotations. As supply continues to tighten, industry days of inventories are expected to decline further.

Figure: PV Glass Supply-Demand Balance Trend

Source: SMM

Figure: PV Glass Inventory Trend

Source: SMM

Additionally, policy support has provided some guidance. Under the previous mandatory energy efficiency standard requirements for modules, the raised entry barriers have also increased the usage conditions for glass. The consumption of ultra-high-transmittance and double-layer coating glass is expected to rise. For glass with relatively higher technical requirements, the number of firms that can stably supply it is also decreasing, and involutionary behavior is relatively weakening. The implementation of the policy package will also help improve market pessimism regarding prolonged vicious competition in the industry.

Finally, regarding August glass prices, SMM believes that the current mainstream quotation has been raised to 9.5 yuan/m², which is now a done deal. However, the extent of module scheduled production increases is indeed limited. With cost pressures on modules still lingering, the price negotiation outcome involves gaming behavior. Actual transaction prices are expected to rise, but the magnitude will be determined by corporate bargaining.