TAIWAN: The 26th European Photovoltaic Solar Energy Conference and Exhibition (EU PVSEC) is currently in session. News from the event indicates that manufacturers hold conservative attitudes towards Q4, a sign that pressure to lower price will continue to increase.
According to EnergyTrend, a research division of TrendForce, sellers and buyers are all haggling over conversion efficiency, price, and payment term negotiations. As the European debt crisis is not yet resolved and the arrival of the solar energy industry’s weak season is imminent, the outlook for Q4 is generally unfavorable and manufacturers are facing immense pressure to lower prices.
EnergyTrend indicates that in order to slow the rate of price decline, manufacturers are acquiescing to more lenient payment terms in exchange for better prices while concurrently striving to ease the oversupply situation with capacity adjustments. However, as the main contribution to the current high supply levels comes from Chinese makers, if manufacturers cannot come to a consensus during the PVSEC, EnergyTrend expects that 2HSep. price will see significant adjustments.Source: EnergyTrend, Taiwan.
As there is currently enough contract inventory to fulfill downstream manufacturers’ orders, the spot market has lost momentum. While spot price remains at the US$50/kg threshold at the moment, EnergyTrend expects that this will not be the case for long as many manufacturers have already dumped their inventory surplus on the spot market for cash, in attempts to ease the dual pressures of excess stock and inventory loss.
Q4 will likely see more of the same. According to this week’s survey, average spot price fell to US$50.01/kg, a decrease of 1.01%. As for Si wafers, both mono-Si and multi-Si wafer prices have decreased due to inventory adjustment and price lowering by Chinese manufacturers.
EnergyTrend data indicates that mono-Si wafer price was most severely affected, falling to $2.492/piece, a decrease of 3.86 percent. As for multi-Si price, while solar cell vendors have quoted optimistic prices of $1.8-1.85/piece, the lowest price was still over $1.85/piece. Furthermore, related vendors have introduced mono-like products in hopes of raising price. Thus, this week’s spot price of mullti-Si wafer decreased by 1.69 percent to $1.925/piece.
With regard to solar cells and modules, EnergyTrend reports that from the start of the EU PVSEC there has been pressure for price negotiations, but at present the tug of war continues. Module manufacturers are prepared to face $1.0/Watt pricing, but current spot price is over $1.1/Watt.
As for the situation with solar cell makers, downstream clients continue to demand lower prices, but manufacturers are making concessions with more lenient payment terms. The results have been favorable; mainstream product price remains above $0.7/Watt. This week’s average solar cell spot price was $0.728/Watt, a decrease of 2.67 percent. Affected by Chinese manufacturers’ inventory adjustments, module price fell by 3.47 percent to $1.139/Watt. Thin film product spot price decreased as well, falling by 2.61 percent to $0.932/Watt.
Looking toward Q4, as external factors will not be conducive to demand recovery, price decreases are inevitable and the outlook for manufacturers’ quarterly revenue is subsequently gloomy. However, EnergyTrend believes that this economic downturn is a chance for the global solar industry to separate the wheat from the chaff, as it provides the industry with the incentive to break free from the vicious cycle of price haggling and move towards a more productive future.