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Conservative PV market expected for 3Q11

Posted: 02 Aug 2011 ?? ?Print Version ?Bookmark and Share

Keywords:PV market? solar cell? polysilicon?

PV manufacturers are expecting a modest PV market for 3Q11with moderate September orders, according to EnergyTrend. The market analyst firm's survey revealed that other markets slowed down, while the Chinese market demand stayed high, with the spot price of polysilicon remaining stable.

The report went on to say that, downstream manufacturers are conservative about spot price trend of polysilicon, primarily because most orders from large manufacturers are on contractual terms and only a few purchase on the spot market. Second and third tier manufacturers are the main active participants on the polysilicon spot market, but their combined purchase volume is much less than top tier manufacturers', EnergyTrend noted. Therefore, it is estimated that the current spot market situation cannot support polysilicon manufacturers to raise the price.

PV spot price

Source: Energy Trend

The survey showed that polysilicon price remained between $52/kg and $54/kg. Notably, the trading price in the Chinese market is slightly higher than other areas, ranging from $55/kg to $58/kg, with the average price of polysilicon remaining at $54.55/kg.

The average market spot price of mono-Si wafer stayed stable, and the main trading price stayed between $2.6/piece and $2.65/piece. The current trading price of multi-Si wafer remained between $1.95/piece and $2.1/piece, but the top tier manufacturers' price has increased to $2/piece. On the other hand, the average price of multi-Si wafer has slightly risen by 0.05 percent to $2.051/piece while that of mono-Si waver has increased by 0.04 percent to $2.632/piece.

PV spot prices growing
Another report by EnergyTrend released this month says polysilicon spot prices are continuing to increase. Learn more about EnergyTrend's earlier report.

EnergyTrend has observed that due to strong demand for high conversion efficiency for solar cells and modules, the price remained relatively high with the highest price above $0.9/W. In addition, from perspectives of the production line, the output volume of solar cell with conversion efficiency under 16.4 percent accounts for 10C20 percent. Although the demand for high conversion efficiency solar cells stays strong, manufacturers still need to take selling lower conversion efficiency product into consideration. Therefore, with the pressure of trading price adjustment for lower efficiency products still remaining, trade-off between profitability and inventory clearance is the biggest challenge for solar cell manufacturers. According to EnergyTrend, cell prices fluctuated this week and lower priced products has dragged down the average price by 0.62 percent to $0.797/W. On the other hand, the average price of module, affected by Chinese manufacturers' price quotation, has continuously decreased by 0.78 percent to $1.265/W.

The market situation points to manufacturers putting too much focus on the Chinese local governments' subsidies. To date, Jiangsu, Shandong and Qinghai provinces have announced their local subsidies. However, EnergyTrend believes that fund availability is the key factor for the subsidy program's success. EnergyTrend stated that the subsidy release could help locally-based manufacturers to overcome challenge of the oversupply market.

The Qinghai government attempts to support its PV industry growth through the new subsidy in the hope of making Qinghai province become a big PV production base and market place. Currently, the Qinghai government has achieved the fundamental goal. Additionally, the Chinese market is now the world's biggest PV production base. At this stage, the accumulated production capacity in southeast China can fully meet the projected annual domestic market demand through 2020. The northwestern China has also released new subsidy policy that might further prompt production output. Therefore, EnergyTrend believes that the risk of Chinese PV industry forming a bubble may increase if the oversupply situation continues or even worsens without proper control.

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