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China Module Prices Decline Amid Weak Demand and Oversupply Pressures

published: 2024-07-05 14:42

Prices for Chinese solar modules have reached record lows, according to the latest data from OPIS. The benchmark assessment for TOPCon modules from China has fallen to $0.100 per watt, a decline of $0.005 per watt compared to the previous week. Similarly, Mono PERC module prices have also dropped by $0.005 per watt, now standing at $0.090 per watt. These price reductions reflect a broader trend of subdued market activity driven by weak demand. In response, module manufacturers are slashing prices to secure new orders and maintain cash flow. The current tradable indications for TOPCon modules are being reported at $0.10 per watt Free-on-Board (FOB) China. As the market struggles with low demand, these new record low prices highlight the ongoing challenges faced by Chinese solar module makers.

Exported solar modules destined for Europe are confronting persistent challenges with elevated freight rates, particularly in the Red Sea region. According to OPIS reports, freight rates for shipments from Shanghai to Rotterdam are currently hovering between $0.0164 to $0.0175 per watt (approximately high $6,000s to $7,000 per FEU).

Despite these logistical hurdles, the situation presents an opportunity for module sellers to strategically manage their inventories in Europe.

During Intersolar, market prices showed little movement, holding steady at around $0.10 per watt Free-on-Board (FOB) China, with minor fluctuations of up to +/-0.3 cents. Observers noted that despite the onset of the high installation season, demand for utility-scale projects in Europe appears subdued this year.

Meanwhile, Latin America continues to face challenges, characterized by intense price competition. Module sellers describe the Brazilian market as particularly price-sensitive, with prices generally lower compared to other regions. For instance, TOPCon module prices destined for Brazil have dipped into the range of $0.08 to $0.09 per watt FOB China, with Tier 2-3 module sellers offering prices at the lower end of the spectrum.

These market dynamics underscore the complexities facing solar module sellers as they navigate fluctuating demand and competitive pricing across global markets.

In the U.S., Delivered Duty Paid (DDP) prices for TOPCon modules have recently climbed into the low-to-mid $0.30 per watt range, according to a buyer's observation. This pricing, inclusive of the 201 bifacial tariffs but exclusive of new antidumping/countervailing duties, faces impending changes as exemptions are set to expire mid-week. Sources informed OPIS that any new transactions would likely incur a 14.25% Section 201 tariff, potentially pushing prices into the mid $0.30s per watt range by 2024.

Moreover, domestic demand in China has remained sluggish, exacerbated by mounting inventory pressures. Forecasts anticipate further price reductions in the coming weeks as module sellers aim to liquidate stocks and bolster cash flow. The prevailing sentiment among market participants surveyed by OPIS suggests that TOPCon module prices could dip below CNY 0.8 per watt or approximately $0.099 per watt on a Free-on-Board (FOB) China basis, aligning closely with current production costs for integrated producers.

Looking ahead, although a modest improvement in local demand is anticipated during the third quarter, particularly amid the peak installation season, industry experts suggest that this uptick may not be sufficient to drive price increases in the near term.

 

According to the Silicon Industry of China Nonferrous Metals Industry Association, integrated module sellers maintained operating rates ranging from 60% to 80%. June estimates indicated a module production capacity of 50 GW, slightly lower than the previously expected 52 GW and down by 5 GW from May figures.

China's module exports during the January-April period reached 83.3 GW, marking a 20% increase year-on-year, as reported by China’s Ministry of Industry and Information Technology. The total value of these shipments amounted to $12.7 billion.

Looking ahead in the Free-on-Board (FOB) China market, prevailing bearish conditions are expected to prevent any immediate price increases in modules. However, anticipated production cuts through July could potentially alleviate some supply pressures in the market.

Source: PV Magazine

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