TrendForce Expects Prices Will Remain Flat for Downstream Sectors of Solar Energy before the Chinese New Year

EnergyTrend, a research division of TrendForce, expects the overall PV market price in the first quarter of 2015 to remain constant until the end of the Chinese New Year. Afterwards, shipment demand will decrease and the price will drop. The beginning of holiday season in China meets the end of the holiday season in the US and Europe, and this means that there is a reduction of working hours in China happening at the same time with a return of purchase orders from the US and Europe. Also, the market demand is expected to grow as domestic demand in China picks up and Japanese firms in downstream sector are stocking up materials before the end of their fiscal year. 

Angus Kao, analyst at EnergyTrend, indicated that the price of Chinese polysilicon in the short term will be sustained as China is ending the processing trade of polysilicon from the US and Korea. However, price hike will not occur soon since China imported a vast quantity of polysilicon last year. It will take at least one to two months to exhaust China’s huge stock. Even with the new productions in the coming quarters, the chance of material price increase depends on favorable policy changes and depletion of inventory. With all factors considered, EnergyTrend predicts that the spot price for polysilicon will remain the same until the end of the Chinese New Year, with a minor drop afterwards and spot price is expected to stay between US $18-20/kg. 

Kao stated that with polysilicon supply being plentiful and high-efficiency multi-Si wafers being the chief demand of downstream firms, the key influence behind the price of wafers in this quarter will be technical capabilities. The first-tier manufacturers will maintain their prices either by launching a newer generation of multi-Si wafers or increases the efficiency of existing models to response to the market trends. Those manufacturers that can provide higher efficiency’s products will be able to keep their prices, those that cannot will have to slash their prices to increase sales. EnergyTrend anticipates that the overall price will remain stable, fluctuating between US$0.88-0.90/pc. The price for mono-Si wafer has yet to recover from its sluggish state. Expect them to move slowly downward. 

The uncertainty caused by the US Department of Commerce’s recent decision on the 2014 US anti-dumping and countervailing case, meant the China is still the largest market for Taiwanese solar cell manufacturers, followed by Europe and Japan. Hence, the price depression of Taiwanese solar cells will continue. EnergyTrend projects that Taiwanese solar cells, including high-efficiency multi-Si cells, will face a gradual price drop, with the average price between US $0.32-0.325/W. Any significant price fluctuations will be dependent on the final outcome of the 2014 US anti-dumping and countervailing investigations. 

Due to the US Department of Commerce’s favorable administrative review of 2012 anti-dumping and countervailing case, solar cell prices will also remain flat and constant for the first-tier manufacturers in China as they will be receiving most of the orders. Anticipate a slight and gradual price decrease after the Chinese New Year because of the weakening demand. The US policy is less effective against the fragmented downstream market in demand of high-efficiency multi-Si solar cells. 

The orders for solar modules will concentrate on the first-tier manufacturers in China, filling their production capacities. This again is because of the decision of the US Department of Commerce that allows Chinese solar cell and module makers to export at a lower rate. The impact of foreign modules on the US market is significant as the unit price will suffer a drop greater than 5%. Nonetheless, other regions will not be affected and they will maintain their price stability. 

The module prices for the second-tier, OEM manufacturers, in contrast, are expected to lower as orders are going to major, first-tier brand manufacturers. EnergyTrend anticipates a trend in greater price differentiation between first-tier and second-tier solar modules in the future.