Taiwan’s Market Update
Although the prices from the global supply chain continued to fall, the Taiwanese market was still relatively stable in the global market. However, the market was still not entirely booming due to the problems that have existed for a long time.
- Land consolidations
- Slow review process
- The feeder line has not been completely released.
EPC contractors still hoped that Taiwan’s module manufacturers could reduce the prices further. However, judging from the current market dynamics, where the top-tier manufacturers still need to deliver large orders, the extent of the price reduction space is limited. The remaining manufacturers are affected by the 2-month-extension of the grid connection deadline. As a result, there was only one wave of restocking in March. In April, the restocking was suspended temporarily. The extent of price reductions will also depend on the size of the projects. However, if the revenue of the module manufacturers does not improve by the end of April, the prices could be reduced further to stimulate the demand.
The inverter market dynamic was relatively slow. The price fluctuations were rather limited. However, the quoted price would still depend on the size of the project to determine the overall price. Although Taiwan’s demand for the overall PV installations may fall in 2020Q3. The stage for the battle of 1500V is expected to take place in the 2nd half of 2020.
Global Market Trend
The price of polysilicon continued to decrease this week due to the delay in downstream demand. Judging from the current market situation, the pandemic has deepened its impact on the overall the Chinese domestic supply chain. The prices of China’s polysilicon market continued to decline. The low point of mono-grade polysilicon has fallen below RMB 60. The average price has been reduced to RMB 61 /KG. The supply of the polysilicon manufacturers was sufficient. However, there was not much room for price bargaining due to the demand cooling down.
The major top-tier manufacturers lowered the price of wafers again on last week. The price reduction intensified the panic of the market, which resulted in the downward spiral in the overall wafer prices. Given that the top-tier manufacturers were facing weak demand from the downstream, the B- and C-list manufacturers were also forced to lower prices, hoping to send the shipments as soon as possible to reduce the load of production. This move will put the subsequent shipments under more pressure. The sinking mono-Si wafer prices have further reduced the market size of the multi-Si wafers. There was a wave of blind dumping in the multi-Si markets, where some of the quoted prices were as low as RMB 1 /Pc. However, the lowered price still could not stimulate the growth of orders.
Due to the substantial prices reduction of top-tier PV cell manufacturers, the overall market prices of PV cells have been lowered in sync. The average price of superior high-efficiency mono-Si PV cells (> 21.7%) has dropped to RMB 0.82 /W. Due to the price adjustment in the wafer market, there was also room for adjustment in the cell market. The impact of this round of price fluctuations on the expansion plans of the manufacturers will materialize incrementally. Regarding the multi-Si market, the situation did not inspire optimism due to the stagnant orders. As multi-Si cells began to be priced by cell, there was limited room for price reduction. The extent of decrease was relatively small. It is estimated that the market demand will still be sluggish. The inventory level of PV cell manufacturers will pose a bigger challenge as time wears on. In response to the changing market dynamics, manufacturing capacity reduction may be necessary.
During this time of the year, it is usually the time to negotiate the orders for May. However, due to the impact of the global pandemic, the market demand for modules was still as weak as last week, where very few orders were signed. As the upstream links kept decreasing the prices, each link was feeling the pressure of the rising inventory. Consequently, it was hard to be optimistic about the prices of modules. Their prices continued its downward trajectory. Prices were quoted occasionally. However, the sellers were still more eager than the buyers. Regarding the supply side, the majority of the module manufacturers have not been able to negotiate orders for May yet. In the Chinese domestic market, the demand for large-scale projects has emerged. The bidding prices of the successful bids continued to hit new lows. The profit margin of module manufacturers was already quite narrow.