Chinese markets’ strong demand to PV products has been concluded by the end of installation rush for the June 30 due date. Market demand to multicrystalline PV products significantly decreased, triggering a rapid price drop in this week. In contrast, demand to monocrystalline products was still strong due to better C/P ratio as well as orders for specific projects such as China’s Top Runner Program.
Demand to multi-si gets cool down, while to mono-si is still warm
Currently, polysilicon is in equilibrium between supply and demand. However, polysilicon’s price fell during this week because of frozen demand in the downstream market. Wafer makers are not in any rush to purchase raw materials.
Multi-si wafers’ price rapidly fell along with PV cells’ significant price drop in the recent. In contract, demand to mono-si wafers was still strong in this week and is expected to meet a slight shortage in July. EnergyTrend found that orders for mono-si wafers, cells and modules will remain high in visibility even in July and August.
Nonetheless, the strong demand to mono-si PV products can’t be a drive to mono-si wafers’ price raise. This is because a leading mono-si maker will voluntarily slash its quotes of mono-si wafers starting from July in order to persist on the price gap of RMB0.6 per piece with multi-si wafers. The slashed mono-si wafer price will trigger future price drop across the Taiwan Strait.
As for the PV cell sector, multi-si PV cells’ price fell more significantly than any other sector in the PV value chain. The freezing demand in the downstream market squeezed PV module makers’ orders for multi-si PV cells manufactured by OEM companies, and also lowered the spot price. The later the orders were secured, the lower the spot price was. In July, multi-si PV cells will be manufactured and sold under negative gross profits.
EnergyTrend forecasts that the PV market, especially in China and Taiwan, in the third quarter of 2016 will be in fairly cool. It is still unclear when the domestic demand in China will warm up again. Furthermore, the installation rush ended by June 30 rather than in an earlier period like in the previous years. These two factors accounted for the flat expectation in Q3. Although mono-si PV cell makers will be able to maintain a relatively high spot price during the quarter thanks to stable market demand, it is expected to encounter price fall in Q3 due to the price slash determined by the industry leader in mono-si PV products.
On the other hand, China’s first-tier manufacturers, such as JinkoSolar, JA Solar and Trina Solar, have gradually completed their production capacities in third-party countries. Adding that there is no big surprise in the final ruling of U.S.’s second review of 2012 Anti-dumping and Countervailing duties decision, price of PV cells manufactured in third-party countries has fallen below US$0.36 per watt. PV cells manufactured in overseas facilities are no more guarantee of high gross profit.
As the grid-connected PV capacity in China in the second half of 2016 is anticipated to be lower than in the first half, PV modules’ price has been fallen for weeks. It is visible that PV modules are sold by low price of RMB 3.5 per watt or US$0.46 per watt. The average module prices in different regions will also be on a downtrend to the end of this year because of rising inventories.
