ZHE JIANG BLD Solar Technology Co.,LTD(BLD Solar) is an integrated global solar energy solution provider with 8 years experience of export, a professional manufacturer of cells, panels&modules, inverter, solar system and has informed a relatively complete solar power industrial chain.
The global PV market has encountered a freeze in demand as it enters the third quarter, and declining orders led to rising inventories for wafers, cells and modules. “Prices in different sectors of the supply chain have kept falling through July due to the lack of demand,” said Corrine Lin, assistant research manager of EnergyTrend, a division of TrendForce. “The cell prices in particular have reached their historical lows during this off season.” EnergyTrend expects the situation in the August market to turn for the worst, and demand will probably not pick up even by the end of the third quarter.
“Demand in the Chinese PV market will recover much slower in the fourth quarter compared with the same period of past years because the installation rush during the year’s first half caused the market to overheat,” Lin noted. “The accumulation of inventories in different sectors of supply chain in the recent period may further constrain prices from rising in fourth quarter. Since the entire industry is also seeing a general increase in capacity, the coming off season will be very harsh for PV product manufacturers. Besides cutting costs and raising efficiency, they would have to develop effective coping strategies to deal with the rough and tumble market.”
PV cells are sold below their costs as declining prices have affected the entire supply chain
Prices have been the most stable in the polysilicon market compared with other sectors of the supply chain because mono-Si wafer suppliers have generated considerable demand with their capacity expansion efforts. In China, the average spot price has remained fairly high during this month, fluctuating only slightly between RMB 140 and 145 per kilogram. Price trend in China is expected to stay steady going into August. Polysilicon prices outside the Chinese market, however, have fallen a bit since other regional markets do not have trade barriers that interfere with the pricing.
Wafer prices have declined significantly in connection with plummeting cell prices. Nonetheless, both mono-Si and multi-Si wafer suppliers are still maintaining high capacity utilization rates. So far this month, the average trading price of multi-Si wafers has come to US$0.75~0.77 per piece in Taiwan and RMB 5.6~5.8 per piece in China. “Cell suppliers are now competing with prices that are below product costs,” said Lin. “Prices of multi-Si wafers, on the other hand, are on a more moderate downtrend.” EnergyTrend expects that wafer suppliers will experience greater pressure to lower their prices from the latter half of this month through August. The average trading price of multi-Si wafers may eventually dip under US$0.74 per piece.
Strong demand from China has prevented the mono-Si market from experiencing oversupply. Nevertheless, mono-Si wafer suppliers have recently slashed their prices to limit the overall price gap between their products and the multi-Si counterparts. The average trading price of mono-Si wafers in China has arrived at RMB 6.45 per piece this month, maintaining a difference of RMB 0.6 per piece with the price of multi-Si wafers. In Taiwan, mono-Si wafer’s average trading price has arrived at US$0.88 per piece and will continue to fall. Generally speaking, Chinese mono-Si wafers have an enormous cost advantage and their prices can still be adjusted to remain competitive against multi-Si products.
The PV cell market has suffered from depressed demand. For Taiwanese cell suppliers, the high costs of their products put them at an enormous disadvantage against Chinese competitors. The average cell price worldwide has fallen to a new low of around US$0.26 per watt this month, but Chinese suppliers can still tolerate further price decline, unlike Taiwanese suppliers. Since cells are now being produced at a loss, suppliers have also lowered their capacity utilization rates. Compared with Chinese suppliers, Taiwanese cell makers have made larger reduction to their capacity utilization, by margins of 20~40%. Both prices and trading volume are expected to keep falling in August.
In the mono-Si cell market, aggressive pricing from the Chinese suppliers has caused prices to plunge. As for Taiwanese suppliers, product costs are preventing them from accepting most of the mono-Si cell orders. The trading of mono-cells in the Taiwanese market therefore has been very weak.
The PV module market is facing more uncertainties because of the lawsuit between Hemlock and SolarWorld. The entire industry is watching closely at this case because its outcome may also affect the U.S. antidumping and countervailing duties on Chinese solar imports. Nevertheless, the development of the lawsuit is unlikely to significantly affect the ongoing trade disputes between the two countries. For now, other PV product manufacturers will observe these disputes from the sidelines and stick to their off-season strategies that address only the most basic levels of supply and demand in the market.
Lin added: “Compared with other segments of the supply chain, the module industry has engaged in the largest capacity expansion this year. Prices have fallen simultaneously in different regional markets as inventories pile up. In most markets, modules have come to around US$0.44~0.47 per watt this month. The U.S., Europe and Japan are the exceptions because module prices in those areas have always been fairly high.”