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The Inflation Rates in the Major Economies Were Not Rising. Hence, the Global Panel Industry Was Impacted Negatively
Published Jul.03 2015, 06:00PM (GMT+8)

According to WitsView's latest statistics data, Market Confidence Index (MCI) declined 398.9 points, from 5459.3 points to 5060.9 points during the period from June 5th to July 3th, 2015. Federal Reserve Board stated, even though the United States' consumption expenditure grew mildly; real estate market recovered; the low labor market resource utilization rate was improved; however, the investing and exporting were still soft. Therefore, the Fed will temporarily not change benchmark interest rate. Federal Reserve Board explained, only when the United States' inflation rate rises to 2%, the Fed will consider raising the interest rate and hope to proceed "gradually." For the past few months, the US' inflation rate had fluctuated around 0%. The key for the interest rate to return to 2% is to improve the labor market. Greek banks had been provided emergency loans by European Central Bank (ECB) to operate. Nonetheless, the Greek government and its creditors could not reach any consensus. This made nervous Greek bank depositors speed up withdrawing cash from banks. Consequently, banks were forced to close, and Greek government announced capital control. The dramatic downward spiral of Greek debts adds a big variable to the European economy.  

 
On June 28th, the People's Bank of China (PBC) lowered the interest rate by 0.25 percent and lowered deposit reserve rates for some banks. This was the fourth time to cut interest rate since last November. However, this capital did not enter the physical market; rather, it pursued the speculation market. This trend was disadvantageous to reach the inflation goal that China's government planned to achieve. Currently, China's inflation rate fluctuated around 1.2%, declined 0.3% MoM. The low inflation rate will be a challenge to overcome for China. Japan's government also wants to increase its inflation rate. Because the global oil price dropping will prevent inflation rate from increasing, Japan government actively implements its Quantitative Easing policy by injecting lots of capital into the market. Nonetheless, the policy has not been apparently effective. On top of that, Japan government plans to increase sales tax to 10%; this policy will make the weak market outlook less optimistic. Predictably, Japan's government will keep Japanese Yen weak as a method to stimulate economy.
 
The major economies in the world all have had bad news recently and impacted overall panel industry to certain extent. The top four economies except for the United States all are implementing their Quantitative Easing policies and keeping on depreciating their currencies. For brand vendors who target at those nations, this is not an optimistic sales outlook. Consequently, brand vendors' demand for panels are worsening and causing risks. WitsView said because the inventory levels are rising and the risks of panel oversupply appear; therefore, the price of IT panels are declining. TV panels, which used to have stable prices, started to loosen up their prices. As for the 2H15's outlook, the first focus is that panel industry needs to consume the panel inventory. Secondly, the each application's end sale will affect whether new wave of panel demand will take place or not. These two factors are keys to change the balance of demand and supply. If those factors do not develop as expected, and in 2016, new capacities will get operating, the supply and demand will lose balance. The real trial for global panel industry will start then.
 

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