TrendForce: Launch of EU-China new agreement leads to unpredictable PV price in the third quarter
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August 12, 2013 (Investorideas.com renewable energy stocks newswire) The new agreement between China and Europe on EU imports of Chinese solar panels has officially been launched. The result of the minimum price and volume limit, which the industry is most concerned about, has also been released. The minimum price of Chinese modules shipped to Europe from now on will be €0.56/Watt. Although the amount of volume quota hasn't been finalized, the industry has considered 7GW/year as a reasonable amount. According to EnergyTrend, a research division of TrendForce, the minimum price agreed by China and Europe is higher than what Chinese manufacturers proposed earlier and lower than European manufacturers' production costs. In addition, the decomposition of unit cost may allow manufacturers that specialize in certain areas to raise the price, thus price may be unpredictable in the third quarter.
Taiwan's cell price may go downward in the third quarter. Since the new agreement didn't bring too much pressure on Chinese manufacturers, changes have been made toward the orders that were originally transferred to Taiwanese manufacturers in order to avoid risks. For now, both OEM product price and sales price have declined. As indicated by the price investigation, OEM product price in Taiwan's cell industry has dropped below $0.2/Watt and the price of first-tier manufacturers has dropped to $0.19/Watt. For mainstream products, although sales price of first-tier manufacturers remains at $0.4/Watt, the price of second-tier manufacturers has dropped below $0.4/Watt. Besides, because the new agreement actually benefits first-tier Chinese manufacturers, quite a few manufacturers have started to cancel the orders, delay shipments, and choose to use their own products first. According to several Taiwanese manufacturers, the current order status of the third quarter remains in good shape. Shipments to Europe, USA, and Japan are all relatively steady. The orders that are affected are the ones transferred from Chinese manufacturers. However, it may have different impact on each manufacturer due to different order quantity placed by Chinese manufacturers.
On the other hand, the decomposition of cost is likely to have a notable impact on price. Deducting the manufacturing cost of modules and cells, upstream polysilicon and silicon wafer manufacturers may pave the way for further price growth. Several silicon wafer manufacturers indicate that previous price revision was mainly on modules and cells, silicon wafer and polysilicon manufacturers didn't benefit from it at all. The new agreement that sets a minimum price on modules can help silicon wafer manufacturers to revise the price upward. Based on EnergyTrend's estimation, the difference between the price of normal-grade products and the above cost structure is about 30%-35%, and that between the price of high-efficiency products and the above cost structure is 25%-30%. Therefore, polysilicon and silicon wafer manufacturers are intended to revise the price recently.
Judging from the spot market's overall performance, both upstream and downstream manufacturers in the Chinese and Taiwanese market have accepted the price to be revised upward. This week's polysilicon price continues to increase with average price reaching $16.321USD/kg, a 0.12% rise. For Chinese domestic demand, the price range still falls between $130RMB/kg-$140RMB/kg. For silicon wafer, future price can be unpredictable with sellers refusing to lower the price. Yet, this week's average price remains stable. For cell, Taiwanese manufacturers' cell price has started to decline. This week's price drops to $0.401/Watt, a 1.96% decline. For module, since second/third-tier Chinese manufacturers continue to clear out inventory, this week's average price comes to $0.683USD/watt, a 0.29% decline.
TRENDFORCE is a global leading research institution providing market intelligence, in-depth analysis reports and consultant services on technology sector. Our company consists of 4 major research divisions---DRAMeXchange, WitsView, LEDinside and EnergyTrend which cover the DRAM, NAND Flash, PC, display ,LED and Green energy research sectors respectively . www.trendforce.com
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