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Policy directives from the Chinese government continue to drive the country’s demand for photovoltaic (PV) systems. China’s National Energy Agency has recently increased the national PV installation target and expects an additional 5.3GW-worth of generation capacity to be in operation by the middle of next year. Moreover, demonstration PV projects related to the first phase of the country’s “Top Runner” program are set to operate at the same time as well. Thus, the PV sector will see a surge of orders from China right after the end of this year. Orders from the U.S. will also remain steady through this year even though the market there might start to cool off a bit in December. In sum, quote prices across the PV supply chain will continue to rise at a moderate pace, according to EnergyTrend, a division of TrendForce.
“A steady stream of orders will keep the overall production capacity fully booked until the start of the next Chinese New Year holidays in February,” said Corrine Lin, EnergyTrend analyst. “Afterwards, the Chinese demand will continue to keep the sector busy. The U.S. market will also pick up earlier than normal due to stock up activities in preparation for the year-round demand of that region. Therefore, the second quarter of 2016 will be very different from the same period of this year because the PV sector will not be negatively affected by seasonality.”
EnergyTrend’s latest price report shows that in the PV supply chain, polysilicon suppliers are facing weaker prices. The trading prices in the Chinese market are currently between RMB 112~113/kg. While suppliers have been receiving large volumes of orders from the downstream clients, oversupply has become a serious problem and it might suppress potential price increases. Hence, EnergyTrend expects polysilicon prices to remain relatively low through October.
As for Si wafers, the Chinese market has been calm during the National Day holidays in early October. Taiwanese wafer manufacturers however have raised their quotes in response to further increases in cell prices. Prices in the Taiwanese wafer market have generally risen by about US$0.005~US$0.01/pc in October.
Across the supply chain, price increases have been most noticeable in the cell market. Many Taiwanese cell products with conversion efficiency rates of 17.8% and above are now standing at US$0.325/W. Also, products from first-tier Chinese manufacturers are advancing towards RMB 2.35/W. Cell manufacturers are optimistic about the market even though they expect the orders from the U.S. to slow in the beginning of December. Orders from Japan and China will help fill this void. On the other hand, demand of mono-Si cells is still weak and their inventory level continues to rise. The drop in mono-Si cell prices is a notable exception to the general uptrend, with quotes from some Chinese manufacturers matching the prices of high-efficiency multi-Si cells.
“Demand for mono-Si cells will not change much this year despite manufacturers cutting their prices,” said Lin. “However, these products are already very competitive and their impact on the demand of multi-Si PERC cells will become more visible next year.”
The module market is benefitting from the strong demand brought on by the Chinese power plant projects. First-tier module companies are thus seeing strong shipments and expect consistent and moderate price increases after China’s National Day holidays. Presently, 260W modules from some manufacturers have arrived at the RMB 4.05/W threshold, and their prices are likely to keep rising incrementally on a weekly basis. Second-tier module companies have seen their prices returning to RMB 3.85~3.95/W because their capacities are as fully booked as the capacities of first-tier companies. On the whole, EnergyTrend believes module prices will continue to climb in the near future.