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Gloomy Global Economic Outlook Accelerated the Pace of Panel Price Fall
Published Dec.15 2015, 11:36AM (GMT+8)

According to WitsView's latest statistics, Market Confidence Index (MCI) rose 10.1 points, from 4208.5 points to 4218.6 points during the period from November 4th to December 14th, 2015. The US government revised upwards 2015's GDP growth rate from previous 1.5% to 2.1 %.The major growth momentum came from 3Q15's personal consumption expenditure's 3% growth.United States Department of Labor announced that October's unemployment rate declined 0.1% MoM and came to 5%. Initial claims for unemployment insurance benefits declined for 11 thousand people and reached 260 thousand people. On a whole, the data were encouraging.However, currently, the employment level of the US' working-age population has remained low. It seems that the US government still needs to work on the job market in order to get out of the slump.If the current job market status can be improved, the possibility that the Fed will raise the interest rate will increase because the macro economy has been steady, and oversea economies and their financial markets' probability of moving downwards have decreased. The final annual GDP of Germany increased 1.8%. German economy's growth rate slowed down from 0.4 percentage point in 2Q15 to 0.3%. Although Volkswagen's diesel vehicle scandal crisis hurt the largest car manufacturer in Euro zone and its sales growth in the top five markets had become weak, the negative impact was limited. Its market share in the new vehicle market of EU only shrank 0.8 % and reached 25.1% YoY. The external factors that caused Euros' currency exchange rate to fluctuate have decreased. The US' and Germany's domestic economies have been stable. All these factors have made Germany's economy have a positive outlook in the short run. 

 
China's National Bureau of Statistics announced that the manufacturing PMI in November dropped 0.2% YoY and reached 49.6%. It was still lower than the threshold 50, and it has stayed in the recession range for four consecutive months. The major reasons why production expansion was slowed down were because both weak domestic and exporting markets, and because of the current off season of manufacturing. Because of weak domestic market demand in China, and because of CPI's and PPI's continuous shrinking, China's people became pessimistic toward the economy's outlook and became conservative in consumer expenditure. China government implemented policies of lowering the deposit reserve rates and lowering the interest rate in order to stimulate sales and maintain the economy stability. Japan's unemployment rate in October reached a new record low, which was 3.1 percentage points. Both its labor participation rate and women's employment rate in the age range from 15~ 64 years old have increased. However, affected by price of crude oil fall, Japan's latest core CPI dropped 0.1% YoY and reached 103.5. (It was based the comparison to index of year 2010, of which was 100). Japan's core CPI had dropped for three consecutive months, and this meant that Japan has been in the slump of deflation and got further and further away from Band of Japan (BOJ)'s previous target which was 2% inflation rate in 2H16. Although facing such difficulty, BOJ still did not mention any thoughts of expanding the scale of quantitative easing.
 
As it is near the end of 4Q15, the wave of boosting shipment for end of year sales had finished. As a result, December's panel price has continued to drop. According to WitsView's latest panel price report, prices of all sizes of TV panels have showed no signs of stop falling.Amid the different size segments, panel price of 32-inch segment already fell below its cash costs. Currently, China's panel makers have no plans of cutting products. WitsView predicts that panel price of 32" will continue to fall.Moreover, 55-inch and above size segments have played an important role of adjusting capacities and adding new capacities. However, WitsView predicts that in the future, due to weak demand and entering a traditional slow season, 55-inch and above size panel price will plummet over US$10.As we observe the global panel market in 2015, the end-market demand was not as strong as before because global economy slowed down despite of panel price fall. For each application, WitsView predicts that TV panel's annual shipment will be 269.7M units, up 8.9% YoY. NB panel's annual shipment will reach 175M units, down 8.7% YoY. Monitor panel's annual shipment will be 142.3M units, down 10.9% YoY. Tablet panel's annual shipment will be 207.4M units, down 9.7%. One more noteworthy thing is that large size panel's annual shipment that has grown positively showed decline for the first time. Its annual shipment was 794.4M units, down 4.1% YoY. These data, again, showed a warning sign for a saturated panel market.
 
 

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