Declining Demand Triggers Price Drop; Photovoltaic Glass Industry May Be Preparing for a New Round of Coordinated Production Cuts

Following a short-term boost driven by the installation rush, photovoltaic glass has once again entered a downward price trend. Leading enterprises may initiate a new round of coordinated production cuts to stabilize market prices. According to industry sources, due to weak current demand and continued losses, some photovoltaic glass companies have opted for production reductions or cold maintenance, leading to a decline in overall capacity.

Several photovoltaic glass manufacturers told Cailian Press on Monday that specific production cut ratios have not yet been determined. A representative from the investor relations department at Flat Glass Group Co., Ltd.（601865.SH）stated that the company’s production and operations remain normal. As operational conditions differ among companies, maintenance of aging furnaces has already begun since the second half of last year, and production adjustments will continue.

Market sources suggest that most glass producers are planning to implement production cuts starting in July to improve supply-side conditions, with reductions possibly reaching 30%. However, some enterprise representatives indicated that while the trend of capacity reduction is ongoing, the scale may fall between 15% and 20%, rather than reaching 30%.

Since the beginning of this year, photovoltaic glass prices have experienced significant fluctuations. Staff at Kibing Group（601636.SH）confirmed that its photovoltaic glass furnaces are operating normally. Between March and May, glass prices remained favorable, but following the end of the installation rush in June, demand declined, and the supply side did not show significant maintenance or production cuts, leading to substantial price decreases.

Data from Longzhong Information shows that at the start of the year, photovoltaic glass was priced at RMB 12/sqm. Prices surged to RMB 14–14.5/sqm in March due to the installation boom, but plummeted to RMB 10.5/sqm in June—below the production cost for most enterprises. Leading firms are now only covering their cash costs, and once expenses such as SG&A, labor, and depreciation are accounted for, they are operating at a loss. Losses are even more severe among second- and third-tier manufacturers. Some companies with particularly high losses began reducing or halting production before June.

Industry insiders stated that the recent price volatility in photovoltaic glass was primarily triggered by a sharp drop in demand from downstream module manufacturers following the end of the installation rush. Inventory levels remain elevated. Normally, the inventory cycle for photovoltaic glass is around two weeks, but the current industry inventory has reached 31–32 days—significantly above normal.

According to SMM, although the number of production days is expected to rise in July, the expansion of production cuts is projected to lead to the first decline in photovoltaic glass output since the Spring Festival. July supply is estimated to fall to approximately 45GW.

The analysis further indicates that production reduction measures were already being implemented in June. SMM statistics show that in June, domestic production capacity reductions included 3,850 tons/day of capacity idled or under maintenance, an additional 3,020 tons/day sealed, and recently another furnace with 650 tons/day capacity began scaling down—signaling a rapid decline in supply.

However, no enterprises have officially confirmed the exact reduction ratio. Longzhong Information analyst Gao Ling told Cailian Press that the industry’s total capacity is currently around 130,000 tons/day, and there is uncertainty around the execution of the proposed 30% reduction. If the current operational capacity is approximately 93,000 tons/day, a 30% reduction would lower daily melting capacity to 60,000–70,000 tons, while estimated demand stands at 80,000–85,000 tons, indicating a potential supply shortfall.

It is worth noting that in September last year, leading photovoltaic glass companies reportedly launched a coordinated production reduction campaign. According to previous reports, the top ten photovoltaic glass producers held an emergency meeting and agreed to implement furnace shutdowns with a reduction ratio also set at 30%.

Gao Ling stated that from July to December last year, actual production cuts totaled approximately 30,000 tons/day, a 26% decrease, with high implementation effectiveness. This accelerated the elimination of outdated capacity, improved the supply-demand gap, and contributed to a price rebound.

However, due to the significant scale cost advantages in photovoltaic glass production, while price recovery can be achieved through output reduction, production costs also rise in the process. Therefore, product price increases do not necessarily translate into improved profitability, and expectations of a return to profits remain uncertain.

Xinyi Solar (00968.HK) and Flat Glass together account for over 50% of the market. In terms of financial performance, Xinyi Solar reported a net profit of RMB 1.01 billion in 2024, a year-on-year decrease of 73.8%, while Flat Glass posted a net profit of RMB 1.007 billion, down 63.52%. In its annual report, Flat Glass stated that irrational expansion across various segments of the photovoltaic industry in recent years, coupled with slowing demand growth, has resulted in excessive supply exceeding market absorption capacity. This has led to a persistent imbalance between supply and demand, continued price drops, and significantly compressed profits across the industry, with most firms experiencing losses and facing serious challenges to development.

Photovoltaic glass is a key auxiliary material in module manufacturing and the segment where capacity mismatches are most pronounced. Flat Glass noted that recent supply-side reform measures have included capacity reduction, price controls, and output quotas. The industry has launched a major self-rescue effort to eliminate excess capacity and limit new capacity releases, gradually improving the supply structure and relieving the pressure caused by earlier aggressive expansions.

However, despite progress in capacity reduction, the fundamental supply-demand relationship has not been fully reversed. With expectations for lower terminal installations and insufficient demand support, prices are projected to continue fluctuating at low levels.

Based on current capacity, the industry is expected to face fierce competition through 2025–2026. A wave of furnace maintenance is expected in 2027. According to Gao Ling, most existing capacity was added in 2021–2022. With a typical maintenance cycle of 6–8 years, the industry will likely undergo widespread furnace overhauls starting in 2027, leading to about half a year of capacity gap. This is expected to significantly impact supply and offer stronger firms a chance to stand out, potentially improving profitability.