PVinsights: The RMB depreciation affects all solar prices negatively

Both multi-crystalline and mono-crystalline solar module price declined incrementally this week. As the long term prospects of the U.S. market has improved, more and more Chinese module makers are employing price reduction strategies in order to compete with other tier-1 rivals and western peers in capturing more market share in the U.S. market. Hence, the solar module price in the U.S. is being pulled down by the strategic pricing competition. Furthermore, solar panel prices in China have also dropped in USD term due to the depreciation of RMB.



Both multi-crystalline and mono-crystalline solar module price declined incrementally this week. As the long term prospects of the U.S. market has improved, more and more Chinese module makers are employing price reduction strategies in order to compete with other tier-1 rivals and western peers in capturing more market share in the U.S. market. Hence, the solar module price in the U.S. is being pulled down by the strategic pricing competition. Furthermore, solar panel prices in China have also dropped in USD term due to the depreciation of RMB. On the other hand, solar panel price in Japan is supported by the JPY appreciation that leads to a slight price increase in the USD term. As for solar panel prices in Europe, the prices remain still as the demand in the region has been fairly immobile. Therefore, the overall solar panel price drops slightly mainly due to the RMB depreciation and the US strategic price competition by Chinese module makers.

Multi-crystalline cell price remains flat, affected by the RMB depreciation and the reluctance of solar module makers to accept further price hikes. As the depreciation of RMB has significantly hampered the purchasing power of Chinese buyers, solar panel manufacturers are now strongly resisting the further price hike of upstream components. Moreover, with the depreciation of RMB, solar cell price in China has also dropped in USD term. Therefore, overall multi-crystalline cell price remain stable, although the suppliers outside China continue to increase their price quotes. On the other hand, mono-crystalline cell price falls slightly this week. Although the price of mono-crystalline cell stays flat in RMB term, the price is translated into a marginal decrease in USD term, due to RMB depreciation. Moreover, the price of mono-crystalline cell outside of China is unable to be lifted as the demand improvement of mono-crystalline cell is still very fragile. As a result, mono-crystalline cell price declines moderately this week, affected by RMB depreciation and fragile demand in overseas market.

Multi-crystalline wafer prices rise slightly this week, but the momentum of the current price hike is gradually slowing down. Although the demand visibility remains high, and producers still try to leverage the tight supply situation to increase their price quotes, the acceptance from buyers is now eroding. Due to stagnation or mild decrease of module and cell prices, wafer buyers are now resisting any further price increase. Furthermore, as multi-crystalline and mono-crystalline wafers have now converged at the same price level, the pricing strategy of leading mono-crystalline wafer manufacturer, Longi, is now impacting the multi-crystalline price trend. As Longi intends to maintain its competitive price stable over the coming months, multi-crystalline wafer market leader, GCL, is also forced to keep wafer prices flat, which in turns limits the scope of increase for smaller manufacturers. Meanwhile, mono-crystalline wafer prices fall marginally this week in dollar term, due to the impact from the RMB depreciation on the flat Chinese prices. In markets outside China, the demand is also not strong enough to reverse the downward price pressure on mono-crystalline products.

Poly-silicon prices continue to drop marginally this week, as the oversupply situation carries on. Despite more efforts from producers to reduce the poly-silicon supply, through capacity curtailment or even the closing down of some factories, the scope of overall production reduction is not enough to stabilize the market prices. On spot market outside China, poly-silicon prices are still under pressure and continue to drop slightly. Meanwhile, major international poly-silicon suppliers have maintained their price quote stable in USD or EUR term. Nonetheless, oversupply pressure applies particularly on domestic poly-silicon producers. As some Chinese suppliers are facing liquidity needs before the Chinese New Year, the market uncertainty persists and pulls spot prices down this week.

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