Price of solar cells in 4Q10 estimated to drop by 8-12pc due to weak demand and climate impact

TAWIAN: Affected by the forecasted declining market demand in the first half of 2011 and the current severe cold weather in Europe, TrendForce, the research institute, indicates that the price of solar cells in the fourth quarter of 2010 may decrease by 8-12 percent to $1.21/per Watt～$1.26/per Watt.

According to TrendForce’s survey, the average price quote of solar cells in September slightly declined by $0.01. However, the average price quote still remained at $1.43/per Watt in the third quarter of 2010. Besides, the capacity utilization rate has maintained at high level. It is forecasted that the profitability level may remain high.

As for the outlook of solar cells in the fourth quarter of 2010, since the demand from the German market has started declining, the spot price in 1HOct arrived at $1.38/per Watt - $1.4/per Watt, declining by $0.02-0.04 MoM.

In terms of the price quotation of December in 2010, the bid price from solar module manufacturers dropped to around $1.3/per Watt, reducing by 6-7 percent compared to the current bid price. It is showed that module manufacturers took a conservative attitude towards the demand in the first half of 2011, which met TrendForce’s early forecast on the worldwide solar market demand in 2011.Source：TrendForce, October 2010.

In terms of the demand and supply of solar cells in the latter half of 2010, the demand still remained strong. However, the dates of shipments were mostly scheduled before the end of November, which caused the declining price in the fourth quarter in 2010.

On the other hand, according to the latest weather forecast, influenced by anti-ENSO events, the severely cold weather in the European areas may occur. It is estimated that the opportunity of rush orders is low in Europe in December, and that is unfavorable for prices to increase.

TrendForce indicates that the price fluctuation of solar cells only limited to the transactions between solar cell manufacturers and module manufacturers at this stage.

Hence, the price of wafers still remains the same, which is not affected by the declining transaction price for the downstream clients. If the pressure from the decreasing solar cell price continues to increase, the solar cell manufacturers are forced to reduce the prices of wafers and Poly-Si to reflect costs.