In the past, Europe accounted for the greatest share of global solar demand and dictated the market’s movements, but as the Asia-Pacific market fast expands, China and Japan are playing a much larger role. Demand from those two Asian countries usually rises sharply in the fourth quarter and carries through to the first quarter of the following year. “From early September, the entire supply chain has been preparing for the imminent surge in demand from China and Japan that will come in the fourth quarter,” said Jason Huang, research manager at EnergyTrend, a subsidiary of the Taiwan-based market intelligence firm TrendForce. When that demand shoots up, second and third-tier companies will use OEM orders to increase their utilization rates and the overall utilization rate will return to more than 85%, Huang added.
While polysilicon prices were stable for the most part, they did decrease incrementally because of ongoing trade disputes in the third quarter. Those disputes also caused international polysilicon manufacturers including Samsung and Tokuyama to delay expanding production capacity. As a result, there was not a significant increase in polysilicon raw material shipments. As the trade disputes drag on, China has temporarily halted processing trade applications, and is using that as leverage in trade negotiations with the U.S. The U.S. government’s final decision in December regarding anti-dumping and countervailing duties on Chinese solar manufacturers will affect whether Beijing will continue to use tariffs to bar U.S. polysilicon imports, Huang said, adding: “The polysilicon market will be more volatile in 2015 if China and the U.S. cannot reach an agreement on anti-dumping and countervailing duties.” That could lead to polysilicon prices rising in the Chinese market, but falling sharply in other markets.
There are two emerging long-term trends in the silicon wafer market. First, top manufacturers will acquire greater market share as demand for efficiency increases. Second-tier and third-tier manufacturers will not be able to meet that demand because of technology limitations. Second, to raise power output, silicon wafers may become larger. Alternatively, manufacturers will return to developing mono-like wafers.
Taiwanese cell manufacturers have long been dominant players in the development of high-efficiency cells. To increase product competitiveness as they expand into new markets, they have boosted monosilicon production capacity. The Taiwanese manufacturer Neo Solar Power’s (NSP) monosilicon production capacity is now close to 50% of its total production capacity. Other manufacturers have also increased monosilicon production capacity. Taiwanese vendors’ monosilicon production capacity in 2015 is expected to reach 30-40% of their overall production capacity.
In the module sector, global production capacity exceeded 64GW in the fourth quarter, well over 40% of global demand. Despite high volume production, there have been marked differences in utilization rates since modules can be easily adjusted. For instance, in the third quarter, some second and third-tier manufacturers’ utilization rates fell below 50%, with some even halting production. From an annual perspective, six out of the top 10 global module manufacturers (including thin film manufacturers) are from China. More than seven module manufacturers will ship over 2GW of products, while Yingli Solar and Trina Solar may ship over 3.5GW of solar products. The two companies are expected to maintain shipment volume of more than 1GW in the fourth quarter. Compared to 2013, these manufacturers’ shipment volumes increased more than 30%, and far exceeded global demand growth. Shipment volumes are now concentrated among top manufacturers.
This week’s price quotes
Despite China’s week-long October holiday, prices have not been affected too much. Currently, fourth quarter orders look stable, but manufacturers are waiting for the end of the holiday in China to see if prices rise as expected. Right now nothing is for certain. Polysilicon prices fluctuated this week as expected, rising 0.29 percent to US $ 20.4 / kg. Low-cost silicon wafer prices held steady, while standard polysilicon and monosilicon wafers rose 0.22% and 0.85%, respectively, to US $ 0.9 / pc and US $ 1.18 / pc. There were no large changes in cell prices. Chinese cells did increase 0.32 percent to US $ 0.315 / watt. Module prices remained the same as last week.