Glass prices in August underwent several adjustments, and there remains a risk of further decline [SMM Analysis]

In August, domestic glass prices continued to decline. As of now, the new prices for glass are as follows: 2.0mm single-layer coated (13.5-14.5 yuan/square meter); 2.0mm double-layer coated (14.5-15.5 yuan/square meter); 3.2mm single-layer coated (23.0-24.0 yuan/square meter); 3.2mm double-layer coated (24.0-25.0 yuan/square meter). In mid-August, domestic PV glass prices temporarily stabilized, but there is still a risk of further decline. In August, glass prices fell by about 1 yuan/square meter compared to July.

Regarding the price trend, domestic glass prices fell significantly again in early August, with prices for 3.2mm and 2.0mm glass both dropping by 1.0 yuan/square meter. The reasons for this price drop are twofold: on the one hand, although module demand has increased, the overall planned production remains below 50GW, and the demand recovery is lower-than-expected; on the other hand, domestic glass producers' inventories continue to rise, with the industry average days of raw material inventories exceeding 30 days, creating significant inventory pressure. Under the impact of high inventory and low demand, prices began to fall, and glass producers were keen on destocking by offering discounts.

Supply side, as of August, three kilns have undergone cold repairs, involving a capacity of 2,300 mt/day. Among them, two kilns in Anhui with a capacity of 1,800 mt/day and one kiln in Hebei with a capacity of 500 mt/day. Subsequent supply reduction is expected to restore the supply-demand balance.

In summary, for the subsequent price forecast in August, SMM believes that although the number of cold-repair glass furnaces continues to increase, the supply-demand pattern in August will still be oversupply. The inventory in the glass industry is expected to increase slightly. To reduce inventory, the subsequent price of glass is expected to continue to decline, but due to the support of enterprise cost pressures, the decline will be limited, with the overall transaction center shifting downward.