HK Stock Market Move | Photovoltaic industry chain continues to rebound, photovoltaic glass production capacity continues to decrease, and post-holiday industry chain prices are expected to recover to above cash costs.

The photovoltaic industry chain continued to rebound. As of the time of writing, FLAT GLASS (06865) rose by 6.8% to 12.56 Hong Kong dollars; GCL TECH (03800) rose by 6.36% to 1.17 Hong Kong dollars; XINYI SOLAR (00968) rose by 4.42% to 3.31 Hong Kong dollars; XINTE ENERGY (01799) rose by 4.22% to 7.4 Hong Kong dollars. According to Sublime China Information, as of January 9th, the domestic photovoltaic glass production capacity is at 89,700 tons per day. Considering some kiln closures restricting production, the actual effective production capacity is even lower, and current capacity has been reduced to levels close to June 2023. In terms of inventory levels, as of January 9th, the manufacturer's inventory days were 33.7 days, maintaining a downward trend overall since November 2024. Looking at the supply side, there are still plans for kiln cold repairs in the industry, and supply is expected to further contract. China Securities Co.,Ltd. pointed out that the recent rebound in photovoltaic prices is mainly due to silicon wafers and batteries going through a few months of destocking cycles, and inventory being at a low point, while demand for the industry chain stocking up before the Spring Festival is releasing concentrated demand. Currently in the industry's off-peak season, downstream demand is expected to gradually recover after the Spring Festival, continuing to destock the industry chain, and prices are expected to recover to above cash costs. However, further price increases will require a significant destocking, especially in silicon material inventory. It is estimated that reducing silicon material inventory to below one month may occur between the fourth quarter of 2025 and the first half of 2026, at which point silicon material prices are expected to further increase.