The increased stockpiles and volatility in the solar panel market as a result of oversupply and geopolitical turmoil respectively, have accelerated the price slump globally. In particular, the slower demand in China has triggered fears over solar price turbulence, not just in China but across the Asia, with potential spillovers for the global market. As sentiment turns extremely pessimistic for the demand outlook for 3Q16, the 2nd tier Chinese module suppliers aggressively lower price quotes near USD 0.42/watt in order to win more solar projects and to digest their increasing production output.
Multi-crystalline cell price tumbles to a historical low this week as the outlook for the demand in China darkens while solar panel stockpiles remain ample. As the vicious competitions among downstream module makers intensify, the 1st tier Chinese module makers emphasize more on inventory adjustment and curtail the procurement of outsourced multi-crystalline cells. With the procurement fall sharply, most of multi-crystalline cell makers, who heavily rely on Chinese orders and remain at full productions, are desperate to offer slashed prices in order to secure orders as soon as possible. Moreover, as the price correction of multi-crystalline wafer enlarges, it gives multi-crystalline cell makers more flexibility in term of further price reduction. Consequently, the blurred order visibility and ample supply have pressured multi-crystalline cell makers to offer prices lower than ever in attempt to secure orders. On the other hand, the price drop of mono-crystalline cell enhances this week as the demand plunges after the rush installation in China ended June 30. Moreover, in order to maintain the market shares, mono-crystalline cell makers also offer more price discounts to curtail the outstanding price gap with multi-crystalline cells, leading mono-crystalline cell price to fall more obviously in this week.
Following the slump of multi-crystalline cell, multi-crystalline wafer price sees a largest correction this week. In response to the downstream demand weakness and price slumps, multi-crystalline wafer makers are forced to offer further price reductions. As the leading multi-crystalline wafer manufacturer takes the lead on lowering the price quotes in July noticeably, the 2nd and 3rd tier wafer makers have to offer more competitive prices to secure orders. Since the prices of multi-crystalline wafer are still above the break-even points, it provides rooms for most of the multi-crystalline wafer suppliers to have further price reduction. On the other hand, mono-crystalline wafer falls less than multi-ones as the drop for mono-crystalline wafer price outside of China is relatively limited. However, the price drop initiates sharply in China, where the demand wanes most obviously. As the major Chinese mono-crystalline wafer supplier adopts strategical pricing to align the price correction with multi-ones, the mono-crystalline wafer price in China are further pressured.
The adverse effects of slumping solar prices and weakening demand in China spread from the downstream to the upstream polysilicon, driving the polysilicon price to plummet this week. On the other hand, polysilicon prices outside of China are also being pressured as constrained by the price decline in Chinese market. Moreover, as the leading wafer manufacturer turns more bearish regarding the outlook of the demand, the weakening wafer prices also cause the polysilicon to perform poorly as well.