Solar panel prices plunge seriously this week, due to the price competition expanding globally. The fragile and uncertain installation backdrop and policy shocks are all contributing to a softer demand environment as well as the solar prices. In China, as Chinese module makers have already stung by China demand woes, face mounting pain as growing inventories leave many companies starve for cash. The record low bidding prices for power plants in China are the evidence that Chinese module makers are striving to secure the limited orders. Furthermore, in order to meet the shipment target in 3Q, Chinese module makers have expanded their battlefield from China to other major solar markets, especially in the US, Japan, India, and Euro. Since the 2nd tier Chinese module makers target at regions with no punitive tariff enforced, especially in India and Japan, solar panel prices remain pressured as they continue to dump excessive inventories out of China.

Solar panel prices plunge seriously this week, due to the price competition expanding globally. The fragile and uncertain installation backdrop and policy shocks are all contributing to a softer demand environment as well as the solar prices. In China, as Chinese module makers have already stung by China demand woes, face mounting pain as growing inventories leave many companies starve for cash. The record low bidding prices for power plants in China are the evidence that Chinese module makers are striving to secure the limited orders. Furthermore, in order to meet the shipment target in 3Q, Chinese module makers have expanded their battlefield from China to other major solar markets, especially in the US, Japan, India, and Euro. Since the 2nd tier Chinese module makers target at regions with no punitive tariff enforced, especially in India and Japan, solar panel prices remain pressured as they continue to dump excessive inventories out of China. Meanwhile, the 1st tier Chinese module suppliers leverage their increasing capacity in SEA to digest swelled stockpiles in the US and EU. In particular, solar panel prices in the US have witnessed enlarged declines as module buyers intend to be more conservative in procurements amid rising speculation for further price reductions. Consequently, global solar panel prices see the enlarged corrections this week amid intensified global competition by Chinese suppliers and the weakened sentiments from buyers.

The slump of multi-crystalline cell prices has yet to see any signs of alleviation this week. Although solar cell makers have made larger reduction to their production utilization rates, the serious imbalance between supply and demand and the cooling buying sentiments still fail to support the prices. Most importantly, major Chinese module makers conduct stricter control over inventory levels so as to be more conservative in solar cell procurements and prioritize to fulfill their own solar cell capacities rather than outsourcing solar cell manufacturing. Solar cell makers, heavily relying on Chinese orders, are suffering the most from extremely low order visibility from China, while increasing stockpiles. These suppliers could only comply with the slashed prices because their bargaining power has completely depleted and the most important thing for them now is to secure orders as soon as possible. Correspondingly, as downstream demand and multi-crystalline cell prices have deteriorated sharply, the drop of mono-crystalline cell price accelerate at the same this week.

The prices of multi-crystalline wafers continue to drop this week amid the slashed downstream demand and prices. With the production curtailment in the downstream solar cell sector, the purchasing transactions of multi-crystalline wafer become less active as the buyers not only lose appetite of wafer procurement, but also tend to wait for further price reductions. For the 2nd tier multi-crystalline wafer makers without broad customers bases, slashing price quotes seem to be the only strategies for stockpile clearance. However, the scope of multi-crystalline wafer price correction is relatively limited in contrast to multi-crystalline cell due to the limited price correction of polysilicon. On the other hand, mono-crystalline wafer prices drop accordingly following the slump of multi-ones due to the strategical pricing to align the price gap with multi-crystalline wafers that leads by the top mono-crystalline wafer makers.

In contrast to the downstream components, polysilicon prices are relatively sustainable. However, falling downstream prices and weaker demand are still continuously to build-up pressures on polysilicon prices. In China, the polysilicon suppliers are still reluctant to comply with larger price corrections as they rather build up more inventories with anticipation of demand recovery in 4Q16. On the other hand, Germany and Korean polysilicon suppliers lower their prices more obviously than in China, but the scopes are still limited due to sustainable prices in China. As the result, the overall polysilicon prices declines only marginally this week.