Finance Association, November 29 (Reporter Liu Mengran) Since entering the fourth quarter, photovoltaic glass has continued its previous sluggish trend, with prices mainly operating at a low level. The industry expects that the relationship between supply and demand has recovered slightly recently. Currently, major manufacturers are raising prices, but upward support is insufficient, and short-term prices are expected to be mainly stable.

According to data released by the agency Infolink, the prices of 3.2mm and 2.0mm photovoltaic glass dropped to 19.5 yuan/㎡ and 11.5 yuan/㎡ respectively in the fourth quarter.

A CFA reporter called Follett (601865.SH) as an investor and learned that the average price of photovoltaic glass dropped sharply in the third quarter of this year, mainly due to changes in supply and demand. There was an obvious mismatch between glass supply and downstream demand, which had a certain impact on the entire industry and put a lot of pressure on the company's performance.

Financial reports show that in the first three quarters of this year, Follett's asset impairment losses reached 0.206 billion yuan. In response, the company stated at the performance briefing, “Asset impairment losses are caused by cold repair of fixed assets and inventory impairment. Whether there will be more impairment at the end of the year will only be determined after an evaluation based on the actual situation. Next, the company will rationally adjust the production line layout according to market conditions.”

Entering the fourth quarter, are there any changes in industry supply and demand? Wang Shuai, an analyst at Zhuochuang Information, told the Financial Federation reporter that recently, some glass manufacturers have concessionary shipments, and production capacity has been cleared, and some supply and demand relationships have been repaired slightly. Coupled with cost support, some manufacturers intend to raise glass prices in December, but the upward support is insufficient, and short-term price stability is expected to be the main focus.

On the demand side, the US “double reverse” survey raised tariffs on PV modules and PV cells from 25% to 50%. According to Follett's interim report, starting June 6, 2024, the US will resume imposing tariffs on solar products from Cambodia, Malaysia, Thailand and Vietnam, and requires installation to be completed within six months. These trade protection policies have caused Southeast Asian production capacity to be cut or even shut down one after another, thus affecting the installed demand for PV in the short term, which in turn affects the demand for photovoltaic glass.

At the same time, glass is mainly purchased on demand. Most dealers and users are unwilling to prepare goods, and demand has continued to weaken recently.

On the supply side, photovoltaic glass is an important auxiliary material for photovoltaic modules. When production capacity was insufficient, it once became a “stuck neck” link in the industry. In the past few years, benefiting from high demand for photovoltaic terminals and the expansion of module production capacity, photovoltaic glass production capacity peaked in 2022.

However, as a result of a mismatch between supply and demand, the price of photovoltaic glass fell, and the industry's profit margin was severely squeezed. Since this year, the industry has begun to enter the production capacity clearance stage. However, it will still take some time to remove inventory. Wang Shuai believes that due to digestion of finished product inventories, component manufacturers' production schedules for December are expected to decline. Up to now, there are 446 photovoltaic glass production lines in the country, with a total daily melting capacity of 9,4890 tons/day (some installations are limited, actual production capacity is low). Some kilns have cold repair plans, and supply is showing a continuous downward trend.

According to Zhuochuang data, from January to November 2024, the total cooling capacity of domestic photovoltaic kilns was about 24,780 tons/day. Some installations were bursting, and production capacity was significantly reduced.

According to reports, the current industry inventory has been in stock for about 35 days, and the supply is still relatively sufficient. The operating rate of component manufacturers continued to decline from December to February of the following year. Some kilns still have cold repair plans in the later stages, and supply continued to decline.

According to Wang Shuai's analysis, some manufacturers made concessions to ship, leaving room for negotiations. Natural gas prices rose during the heating season. At lower prices for finished products, manufacturers lost to varying degrees, speeding up the clearance of part of production capacity.

Follett staff said that currently the company's inventory has been around 25 days, and the trend continues to decline (decrease). Every aspect is under control this year. The industry as a whole has many plans for cold repairs, and some old production lines are being disposed of. Judging from the industry pattern, the top two leading positions are still stable. Even in the later stages, the market pattern will not change much.