Glass shortage could hinder solar industry development
November 18, 2020 PV InfoLink
As the high season falls upon the final quarter, glass prices surged amid low supplies and high demand. PV InfoLink’s statistics suggest that the average prices of 3.2mm coated glass have increased from RMB 30/m2 in September to RMB 42/m2 in November, while small orders were priced at beyond RMB 45/m2, jumped more than 40% over the past two months. With persistent shortage, PV glass prices are expected to remain high until the first quarter of 2021.
In the face of price hikes, some module manufacturers have lowered utilization rates or even halted production due to glass shortage. What’s worse, module manufacturers’ profits are shrinking because customers don’t accept price increases, forcing sellers to keep prices the same.
In addition, the Chinese government has yet to come up with a policy to cope with PV glass shortage, as the authority stipulates that new glass capacity will need to replace an equivalent volume of decommissioned capacity. The move is to prevent new capacity being added in China’s flat glass industry that has been running at overcapacity.
Factoring in the time required for upgrading furnaces for larger format glass, PV glass is likely to remain in short, with large format glass capacity forecasting to sit at 40-50 GW at the end of 2021. In other words, limited glass capacity will become the hiccup in the development of large format modules.
At the beginning of November, six module manufacturers including Jinko and Longi called for the authority to ease restrictions on the capacity replacement plans and regulate additional PV glass capacity individually to help ease shortage.
China’s glass industry dominated more than 95% of global PV glass production in 2019. Leading Glass suppliers Xinyi Solar Holdings and Flat Glass Group respectively accounted for 30.8% and 20.9% of capacity, and together they occupied more than 50% of the global capacity. Under China’s 14th Five-Year Plan, the industry expects demand for glass to grow alongside solar PV growth. JP Morgan and the Bank of America has raised rating for the two largest suppliers recently, indicating positive outlook for solar PV and glass demand growth.
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