PVinsights: Solar price slumps as competition heats up

Global solar panel prices decline for consecutive weeks, weigh down by growing glut and intense competition amid concern China demand is losing momentum. In China, solar panel remain depressed as Chinese module makers who suffer from frozen domestic demand are strive to win limited solar projects by offer record low prices. Moreover, 2nd tier Chinese module makers, who are imposed with high punitive tariffs to enter EU and US markets, find India, Japan and other emerging countries where no trade barrier enforced to digest their swelled inventory levels, leading solar panel prices in these regions continue to tumble. Meanwhile, 1st tier Chinese module makers with increased capacities in SEA that could circumvent trade barriers target the EU and US markets to compensate the worse-than-anticipated sales in China.


Global solar panel prices decline for consecutive weeks, weigh down by growing glut and intense competition amid concern China demand is losing momentum. In China, solar panel remain depressed as Chinese module makers who suffer from frozen domestic demand are strive to win limited solar projects by offer record low prices. Moreover, 2nd tier Chinese module makers, who are imposed with high punitive tariffs to enter EU and US markets, find India, Japan and other emerging countries where no trade barrier enforced to digest their swelled inventory levels, leading solar panel prices in these regions continue to tumble. Meanwhile, 1st tier Chinese module makers with increased capacities in SEA that could circumvent trade barriers target the EU and US markets to compensate the worse-than-anticipated sales in China. The pricing competition is most intense in the US, as Chinese module players aim to strengthen their presence in this growing lucrative market. Therefore, the fierce competitions that dominated by the Chinese module players have spread from China across the world, leading solar panel prices to drop extensively this week.

Multi-crystalline cell prices slid to another fresh low this week as the weakening demand diminish the appetite of buyers for the procurement of multi-crystalline cells. Although multi-crystalline cell makers attempt to lower utilization rates, the limited curtailment in production does not help to stabilize multi-crystalline cell price successfully. Fears about the fragile demand of China as well as the oversupplied nature are the reasons behind the dismal performance for multi-crystalline cell prices. Moreover, amid rising speculation on further price reduction, order visibility fall extremely low as the procurement activity become more conservative. As the result, the efforts to lower multi-crystalline cell production output fail to balance the overly distorted supply and demand structure as the persistence of the supply overhang is still upsetting multi-crystalline cell prices. On the other hand, mono-crystalline cell prices drop extensively this week. Given the fact that the production cost of mono-crystalline cell are not much different than multi-ones, mono-crystalline cell price at current level still grant mono-crystalline cell makers with a lot of flexibility on lowering prices. Hence, with depressed demand and slumped multi-crystalline cell price, mono-crystalline cell price fall more dramatically than multi-ones this week.

In response to the plunge of multi-crystalline cell price, multi-crystalline wafer prices extend losses this week. Due to the weaknesses of downstream demand and prices, multi-crystalline wafer makers have no choice but to comply with further price reductions in order to secure orders. Nevertheless, the relatively stabilized polysilicon prices have limited the ability for multi-crystalline makers to offer generous price discounts. Such decline in multi-crystalline wafer price also lead mono-crystalline price drop extensively this week as the leading mono-crystalline wafer makers intends to align the price gap between mono- and multi-crystalline wafers within $0.10/pc in order to sustain the market shares of mono-crystalline wafer.

The theme of the downstream glut continues to send shivers through the upstream polysilicon, leading polysilicon price fall this week. However, Chinese polysilicon suppliers still intend to stabilize their price quotes and less willing to comply with further price reductions since downstream wafer makers are still possessing high utilization rates. Meanwhile, polysilicon prices outside of China see a more obvious decline than in China, but still the scope of decline is relatively limited in contrast to the downstream components. Moreover, since polysilicon suppliers, benefiting from the solid demand from China in 2Q16, had the healthy inventory till June, they are not under instant pressure to reduce the price quote for orders but rather to build up their stockpiles. As the result, the overall polysilicon prices only declines incrementally this week.

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