PVinsights:A warning on oversupply

Both multi- and mono-crystalline module prices plummet obviously this week. Ongoing supply growth and falling demand continues to weigh on the solar panel prices, as the fierce price competition has extended globally. In China, the price correction of multi-crystalline module has declined obviously in July, as Chinese module makers leverage strategic pricing in attempts to win the limited solar projects. Due to the entry limitation by trade barriers in EU and the US, the 2nd tier Chinese producers suffer the most with accumulated stockpiles and have to enhance fierce price competition in China, India, Japan, and the emerging countries, where no punitive tariff enforced, to dump their excessive inventories. Meanwhile, in the US, solar panel prices are also being pressured with some quotes lower than $0.50/watt as 1st tier Chinese module makers seek to increase the shipments via its overseas capacities to compensate the worse-than-anticipated sales in China.


Both multi- and mono-crystalline module prices plummet obviously this week. Ongoing supply growth and falling demand continues to weigh on the solar panel prices, as the fierce price competition has extended globally. In China, the price correction of multi-crystalline module has declined obviously in July, as Chinese module makers leverage strategic pricing in attempts to win the limited solar projects. Due to the entry limitation by trade barriers in EU and the US, the 2nd tier Chinese producers suffer the most with accumulated stockpiles and have to enhance fierce price competition in China, India, Japan, and the emerging countries, where no punitive tariff enforced, to dump their excessive inventories. Meanwhile, in the US, solar panel prices are also being pressured with some quotes lower than $0.50/watt as 1st tier Chinese module makers seek to increase the shipments via its overseas capacities to compensate the worse-than-anticipated sales in China. Moreover, multi-crystalline solar panel prices in Japan are also being pressured with some priced lower than $0.40/watt due to the dumping behaviors by some Chinese suppliers. On the other hand, although mono-crystalline module prices remain pressured, the price correction of mono-crystalline module is less than multi-ones as supported by higher demand to high efficiency in the residential market. Consequently, the vicious pricing competition among Chinese module makers have also forced non-Chinese suppliers to adapt lower price quotes, leading overall solar panel prices drop extensively and noticeably this week.

Multi-crystalline cell extend the price slump to another fresh low this week. As the demand in China freezes, Chinese module suppliers are increasing their control over inventories and curtailing the orders on outsourcing solar cells. Nevertheless, the full production outputs by most of the solar cell makers are contradictory to the slashed demand, leading oversupply situation to worsen. Shrinking orders on multi-crystalline cells and escalating price competition are challenging solar cell suppliers as their struggling to maintain price above cash costs and safeguard thinning margins. In addition, as solar panel prices in the US plummet noticeably, the decline in solar cell prices in overseas also accelerate. On the other hand, mono-crystalline cell price fall more dramatically this week following the slump of multi-crystalline cell prices and depressed demand. Some solar cell makers intend to prioritize the production of mono-crystalline cells aim for higher margin. However, the increasing in supply compounded by weakening demand accelerates the drop of mono-crystalline cell this week. As the result, both multi-crystalline and mono-crystalline cells are suffered from the serious oversupply.

The prices of mono-crystalline wafers continue to drop this week as the weakening downstream demand has lead wafer buyers become more conservative on procurements. The deceasing wafer procurements have hampered the bargaining power of multi-crystalline wafer suppliers, forcing the leading multi-crystalline wafer suppliers to offer the further price reductions in order to stimulate the demand. On the other hand, the drop of mono-crystalline wafer price also accelerates along with the prices slump of multi-crystalline wafers this week. The 1st tier Chinese mono-crystalline wafer suppliers continue to adjust the price quotes down in order to narrow the price gap with multi-crystalline ones. Hence, it forces the 2nd tier Chinese and non-Chinese suppliers to offer more competitive price quotes. Hence, both multi- and mono-crystalline wafer price tumbles this week following the slashed demand and downstream prices.

Polysilicon price is not out of the woods yet even after price bounced back in 1H16, with global supplies remaining a significant concern. As the demand outlook remains dimmed, polysilicon buyers are more conservative for the purchases of polysilicon. Unclear order visibility has pressured on polysilicon suppliers to release price reductions. In fact, some Germany and Korean polysilicon manufacturers have lowered their price quotes in response to the weakening downstream prices and demand, while Chinese polysilicon suppliers are still intend to stabilize the prices. As the result, polysilicon prices decline relatively limitedly in contrast to downstream components since most wafer suppliers still keep high utilization rates.

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