Chinese Manufacturers' Capacity Expansion Plans still in Progress despite Continued Price Decrease

According to the latest survey by EnergyTrend, the market demand is yet to pick up, and the inventory in stock still remains at a high level. Although the speed of inventory clearance is still slow, manufacturers expect sufficient recovery will occur in the second half of the year.

According to the latest survey by EnergyTrend, the market demand is yet to pick up, and the inventory in stock still remains at a high level. As a result, the polysilicon price has significantly dropped. EnergyTrend's survey shows that the spot price of polysilicon has fallen to $50/kg at the lowest but such a low price is not widely accepted. Moreover, the average price of solar cell has reached below $0.9/Watt, and downstream manufacturers continued to cut price. Manufacturers indicated that the Intersolar Europe 2011 is going to be held in Munich, Germany next week, so the solar energy market takes a conservative attitude toward the current price quotation. However, EnergyTrend believes that if the outlook for 2H11 continue to remain gloomy, price decrease will continue.


According to EnergyTrend's survey, the polysilicon price has come to 50/kg at the lowest, and the average polysilicon price has rapidly decreased by 2.34%, to $57.5. Although Intersolar Europe is going to start soon and a conservative attitude has remained in the market, it is believed that the closing price might decrease to under $50/kg in the short run. In addition, Si wafer manufacturers are also under price pressure. The average price of multi-Si wafer and mono-Si wafer has respectively fallen by 4.83% and 3.93%, to $2.303/piece and $2.687/piece. Furthermore, the solar cell price has decreased to $0.8/Watt at the lowest, and the average price has dropped by 6.43%, to $0.89/Watt. Manufacturers indicated that the price trend shows a continued decrease. EnergyTrend indicates that solar cell manufacturers have felt much pressure in the decreasing price, so the disagreements between buyers and sellers will remain for now. In addition, since market demand has not picked up, the average price of module has continued to decrease by 0.51%, to $1.35/Watt, primarily because manufacturers are aggressive to lower their inventory.

EnergyTrend believes that reducing inventory is still the key factor for the PV market demand recovery. According to EnergyTrend's latest survey, although the speed of inventory clearance is still slow, manufacturers expect sufficient recovery will occur in the second half of the year. On the other hand, even high inventory level remained, Chinese manufacturers are still optimistic about their capacity expansion plans. Based on recent announcements made by big names, Chinese manufacturers aggressively increase their capacities, in the polysilicon, Si-wafer, solar cell, and module fields. For instance, Top-tier PV manufacturers, like GCL and Trina Solar do not fear the current market downtrend, and still follow their original plan to increase their capacities. This particular market development resembles memory industry a few years ago. However, will this similar development enable Chinese manufacturers to dominate the solar energy industry in the future? EnergyTrend believes that since the PV market largely depends on government policies, the procedure is not easy to be duplicated and the result is not easy to be achieved, either.

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