Panel Prices in August
Suddenly display prognosticators have changed their tune. While panel price increases have lessened over the last few months, August is shaping up to be the first month where some panel prices will decline, although there seems to be considerable disagreement as to by how much. Monitor and Notebook panel prices are still likely to increase, but TV panel prices will not and again with considerable differences between the amounts, the trend is decidedly different than in previous months, and while negotiations between panel buyers and panel producers continue, we notice that even over the last week, TV panel price estimates have declined a bit further.
Accurate panel prices are almost an impossibility as there are so many types in each panel size category, so our angle has always been to average as much of the data as possible to come up with a more normalized price. This is especially helpful when the spread between low and high panel prices for each size increases, a result of both customer allocation at the producer level and double ordering. While the spread had narrowed for many panel types and sizes in 2Q, the spread is beginning to widen again, indicating less buyer willingness to accede to the price demands of panel producers.
That said, experience says when panels have been in relatively short supply, smaller purchasers tend to get allocations below targets, so when demand from large customers begins to slow, panel producers can fill those smaller customers and extend a high level of utilization despite lower demand. We expect this was the case in July and could help to insulate panel producers from the effects of weaker demand for a month or so, but the sustainability of such a situation is poor and those producers focused on TV panel production will take the hit relatively quickly.
As this month there seem to be an inordinate number of panel price prognosticators willing to share their thoughts as to August panel pricing, we have put together early averages, although we expect they will change quickly as rumor and innuendo about orders circulate further.
Accurate panel prices are almost an impossibility as there are so many types in each panel size category, so our angle has always been to average as much of the data as possible to come up with a more normalized price. This is especially helpful when the spread between low and high panel prices for each size increases, a result of both customer allocation at the producer level and double ordering. While the spread had narrowed for many panel types and sizes in 2Q, the spread is beginning to widen again, indicating less buyer willingness to accede to the price demands of panel producers.
That said, experience says when panels have been in relatively short supply, smaller purchasers tend to get allocations below targets, so when demand from large customers begins to slow, panel producers can fill those smaller customers and extend a high level of utilization despite lower demand. We expect this was the case in July and could help to insulate panel producers from the effects of weaker demand for a month or so, but the sustainability of such a situation is poor and those producers focused on TV panel production will take the hit relatively quickly.
As this month there seem to be an inordinate number of panel price prognosticators willing to share their thoughts as to August panel pricing, we have put together early averages, although we expect they will change quickly as rumor and innuendo about orders circulate further.
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