Taiwan’s Market Update: The Module Market Is Recovering
In April, the Taiwan market—from modules, inverters all the way to the downstream system—was dull and almost stagnant. It is estimated that the demand for restocking modules will slowly improve in May. The demand for restocking will peak in mid-June. In April, the overall market price of modules was practically stuck, where the price cannot rise or fall. In May and June, where the grid-connection deadlines are approaching, a small rush of restocking will emerge as a result. However, Taiwan’s overall demand for installation is likely to emerge in the third quarter. Judging from the current situation, it seems difficult to meet the targeted annual new installation of 2.2 GW now.
As the demand improved, the recovery rippled across the entire supply chain. The prices of polysilicon have shown signs of slowing down in their decline. Overall, the extent of decline has further narrowed in comparison with the previous week. There are 3 polysilicon manufacturers carrying out repairs and equipment maintenance at the moment. The accumulated inventory can be digested temporarily due to the output reduction of polysilicon. This, however, does not signify an improvement in the actual demand. The current improvement in demand only slightly mitigates the impasse which supply and demand were initially facing. The key to the actual recovery of the market is still the balance between supply and demand. Only when both of the domestic and overseas market demand improve simultaneously, and the production is dropped substantially, will the prices stop falling and stabilize.
The overall wafer market prices showed a flattened trend this week. As the demand in May emerged, the mono-Si wafers are affected by the recovering demand of the downstream, the prices may rebound in the foreseeable future. However, in fact, the excess supply has not been fixed. The current market situation depends on whether there are urgent orders in the third quarter. On the other hand, it also depends on the progress of the top-tier wafer manufacturers investing in downstream projects, aiming to drive up their own wafer shipments. Given that new production capacity of some wafers is becoming available, only a combination of increased demand and tightened supply may stop the price from plunging further and get it to climb back up again.
After the top-tier manufacturers tried to increase the quoted price and made the sale before China’s Labor Day holiday, the PV cell prices began to rebound slightly. The B- and C-list manufacturers followed suit this week, albeit with limited rate of increase, which was around RMB 0.02 /W. As the pandemic eased in some parts of the world and the PV developers rushed to install the UHV and close the carryover projects from the previous reporting period, the average price of high-efficiency mono-Si PV cells has been slightly increased to RMB 0.780. The cell, on the other hand, is still riding a rising tide in the short term.
As the US, Italian, French and other countries are attempting to resume work in May, overseas orders are gradually increasing. And China's June-30 deadline is slowly approaching, which also starts driving demand in some parts of the market. High-efficiency modules, in particular, benefit from this increased demand, which helps shore up their prices. Regarding the companies, a pattern has already emerged before the Labor Day holiday: the distribution of orders are clearly divided, but not evenly. Most orders were concentrated in the top-tier manufacturers, whereas the quotations of B- and C-list manufacturers got a lukewarm reception. The demand remains unchanged for them. Meanwhile, whether or not the overseas PV projects can resume operation on time still needs to be closely monitored. Additionally, pandemic relapses are a genuine risk, to which careful attention should be given.