Market Trend

According to WitsView’s latest MCI update, between October 11, 2011 to November 11, 2011, the index jumped from 3885.9 to 4100.1, up by a whopping 214.2 points. The increase was largely attributed to the easing of concerns toward the Europe credit crisis, as new administrations were established in both Italy and Greece. In addition, European nations appeared united in adhering to the reforms laid out by the EU, which respectively included reducing their government expenses and lowering their debt. Under the EU’s treaty, it is hoped that the credit crisis can by controlled, as governments ensure that their budget deficit does not exceed 3% of the GDP.

During the first three quarters of 2011, amid deteriorating economic conditions in the US and Europe, it sharply dragged down the end market demand, subsequently resulting in a serious panel oversupply. Thus, severe quarterly losses were posted by the panel makers. Fortunately, there has been some good news recently. Based on WitsView’s latest panel price survey, backed by the panel makers’ production cutbacks in 3Q11 and downstream clients’ earlier inventory pull-in, due to the forthcoming Chinese Lunar New Year, panel prices have at last started to stabilize. Aside from improving market confidence, a panel price rebound is currently expected in 1Q12. However, it should be noted that the key wild card to this positive development is what the actual utilization rates will be in the near future. Moreover, although the Europe credit crisis has become more stable at that moment, it is evident that Europe is experiencing an economic slowdown. The pace of the region’s recovery should be closely monitored.