PV glass prices rebound for the first time, with supply-demand improvement likely to continue into 3Q
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PV glass prices rebound for the first time, with supply-demand improvement likely to continue into 3Q
The price of 2.0mm PV glass rose about 6% week-on-week to Rmb9.5/sqm; capacity shutdowns combined with a second-half demand recovery support continued sequential improvement in prices and leading companies' profitability.
- Mainstream quotations for 2.0mm PV glass rose about 6% week-on-week, the first rebound after the loss-making trough in the second quarter of 2026.
- Industry operating capacity declined from about 88,000 tonnes/day in March to about 73,000 tonnes/day at end-July, indicating a clear tightening of supply.
- Monthly module production schedules recovered from less than 30GW in February to about 42GW in July, driving industry inventory declines.
- Capacity that has undergone cold repair typically takes more than three months to return to full production, making a rapid near-term supply rebound difficult.
- Policy enforcement over the next two months is a key variable; prohibiting below-cost sales may improve cycle stability.
Report interpretation
Overview
The report believes that after the PV glass industry experienced its worst cycle in history in the second quarter of 2026, supply contraction and demand recovery have driven the first price rebound. The price of 2.0mm PV glass rose to Rmb9.5/sqm after market close on August 5, up about 6% from the previous week. With substantial capacity shutdowns, improved module production schedules in the second half, and declining inventories, the pricing environment in the third quarter is expected to continue recovering.
Core views
This price hike is not an isolated event, but an initial manifestation of supply-demand rebalancing. The historical low price of Rmb9/sqm in the second quarter caused broad industrywide losses, including for cost leaders, prompting concentrated capacity exits in June and July; meanwhile, global solar demand is seasonally stronger in the second half, and module production schedules have continued to recover. The longer recovery cycle for capacity after cold repair means near-term supply elasticity is limited. If policies prohibiting below-cost sales are effectively enforced, marginal producers' quotations will be constrained by costs, and low-cost leaders are likely to gain a more stable profit advantage.
Analysis framework
The report uses an industry supply-demand cycle analysis, cross-validating PV glass quotations, operating capacity, monthly module production schedules, inventory changes, and the cycle for restarting capacity after cold repair, and forms stock ratings based on companies' costs, valuations, and positions in the industry chain; it also treats potential enforcement of the price law as a medium- to long-term policy scenario variable.
Methodology notes
Assessing price inflection points through supply exits, demand changes, and inventory destocking
Operating capacity fell from about 88,000 tonnes/day to about 73,000 tonnes/day, while module production schedules recovered to about 42GW/month, narrowing the supply-demand gap and supporting price increases.
Global solar demand is usually stronger in the second half
Monthly module production schedules recovered from less than 30GW in February to about 42GW in July, becoming an important demand basis for inventory declines and glassmakers' price hikes.
Assessing the impact of prohibiting below-cost sales on the industry's price floor
If relevant policies are effectively enforced, marginal producers will find it difficult to continue quoting below cost, the industry cycle may become more stable, and the profit advantage of cost leaders may be strengthened.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Xinyi Solar（0968.HK）A core beneficiary among PV glass names, rated Overweight
- Strengths
- Has a cost-leading advantage and can directly benefit from a rebound in glass prices and industry supply contraction.
- Weaknesses
- The industry is still in the early stage of recovery after losses, and earnings improvement depends on the sustainability of price hikes.
- Comparison
- Together with Flat Glass, it is one of the PV glass manufacturers most favored in the report.
- Risks
- Demand falling short of expectations, inventories rising again, idled capacity resuming faster, or insufficient policy enforcement.
- Flat Glass（6865.HK）A core beneficiary among PV glass names, rated Overweight
- Strengths
- Benefits from price recovery, improved demand in the second half, and potential strengthening of industry pricing discipline.
- Weaknesses
- Near-term earnings are still affected by previous low prices and the industrywide loss-making environment.
- Comparison
- Together with Xinyi Solar, it forms the most direct PV glass recovery allocation theme in the report.
- Risks
- Glass price hikes failing to persist, module production schedules weakening, or new and restarted supply exceeding expectations.
- Daqo（DQ） and GCL Tech（3800.HK）Upstream solar materials names, both maintained at Overweight
- Strengths
- Can benefit from sequential improvement in the solar industry chain in the second half and potential policy intervention.
- Weaknesses
- They are not direct beneficiaries of this PV glass price hike, and earnings are also affected by their respective product price cycles.
- Comparison
- Their positive ratings are consistent with the PV glass leaders, but the drivers are more tilted toward overall industry-chain improvement.
- Risks
- Oversupply in the industry chain, continued pressure on product prices, and end demand below expectations.
- LONGi Green（601012.SS） and Shenzhen SC（300724.SZ）Ratings upgraded from Underweight to Neutral
- Strengths
- The rating adjustments reflect some easing of the most pessimistic expectations and sequential industry improvement.
- Weaknesses
- The report does not list them as the most attractive priority allocations at present.
- Comparison
- The view is more cautious than on XYS, Flat-H, Daqo, and GCL Tech, but better than on names maintained at Underweight.
- Risks
- Insufficient earnings recovery, intense competition, and a lack of further valuation margin of safety.
- Tongwei（600438.SS） and Maxwell（300751.SZ）Both ratings maintained at Underweight
- Strengths
- They have business exposure to the solar industry chain and may be supported by improved industry demand.
- Weaknesses
- The report believes current valuations are not attractive.
- Comparison
- Compared with Overweight and Neutral names, their risk-reward is weaker.
- Risks
- Valuation compression, earnings falling short of expectations, and continued industry competition.
Key data
- 2.0mm PV glass priceRmb9.5/sqmAs of after market close on August 5, 2026, mainstream quotations rose about 6% week-on-week.
- Second-quarter price lowRmb9/sqmA historical low including VAT; the report judges that even cost leaders were in a loss-making position.
- Operating capacityAbout 73,000 tonnes/dayDown from about 88,000 tonnes/day in March 2026 to end-July, a decline of about 17%.
- Module scale corresponding to operating capacityAbout 38GW/monthThe conversion value for PV glass operating capacity at end-July provided in the report.
- July module production scheduleAbout 42GWA significant recovery from the low of less than 30GW in February.
- Time to fully restart production after cold repairMore than 3 monthsThis limits the ability of supply to recover rapidly in the third quarter.
Impact & implications
In the short term, supply shutdowns and a seasonal demand recovery are favorable for sequential improvement in PV glass prices, inventories, and profitability, with cost-leading Xinyi Solar and Flat Glass benefiting more directly. In the medium to long term, if anti-low-price competition policies are effectively enforced, the industry's price floor may move higher, making it easier for leading companies' cost advantages to translate into profits. Other parts of the industry chain still require valuation-based judgment, so the report remains positive on polysilicon leaders but maintains a cautious view on Tongwei and Maxwell, whose valuations are not sufficiently attractive.
Risks
- Global solar demand or module production schedules in the second half may fall short of expectations, causing inventory destocking and glass price hikes to be interrupted.
- Idled or cold-repaired capacity may recover faster than expected, increasing supply pressure again.
- Policies prohibiting below-cost sales may not be introduced, may be insufficiently enforced, or may have limited actual impact.
- The industry is still broadly loss-making, and a single price hike may not be enough to restore normal profitability.
- Supply-demand conditions and valuations differ across segments of the industry chain, so improvement in PV glass may not be transmitted simultaneously to all stocks.
- The forecasts, policy judgments, and market quotations in the report may change with market conditions.
What to watch
- Policy progress over the next two months regarding prohibiting below-cost sales and industry price governance.
- Whether 2.0mm PV glass quotations in the third quarter can continue rising from the Rmb9.5/sqm level.
- Whether industry operating capacity remains below about 73,000 tonnes/day, and the pace of restarting cold-repaired production lines.
- Whether module production schedules from August through the third quarter can maintain or exceed July's level of about 42GW.
- Whether industry inventory declines continue, and whether price increases can translate into earnings improvement for leading companies.
- Xinyi Solar's and Flat Glass's cost advantages, operating rates, and subsequent earnings guidance.