Industrial chain price increases across the board, photovoltaic industry may accelerate reshuffle

2020-10-09 13:49:04

Recently, the entire photovoltaic industry chain has "rised" four times. After the price of polysilicon materials rose by 70% in more than a month, silicon wafers, cells, and modules have also risen.

The industry believes that the price increase stems from the imbalance between supply and demand. At the same time, the GW-level national market for photovoltaic projects has increased significantly, which has impacted market expectations and boosted the price increase in the industry chain. The photovoltaic price increase will accelerate the industry reshuffle, accelerate the promotion of the survival of the fittest, and accelerate the pace of industry restructuring and integration.

Imbalance between supply and demand causes prices to rise

The imbalance between supply and demand has become an important reason to stimulate the price increase of this round of photovoltaic industry chain.

In response to the price increase in the entire photovoltaic industry chain, Jiang Hua, director of the photovoltaic industry research office of the CCID Think Tank Institute of Integrated Circuits, said in an interview with this newspaper that the first is the growth of market demand. The second is the shortage of upstream silicon material supply caused by the polysilicon accident.

“In the first half of the year, due to the impact of the new crown epidemic, the domestic and foreign markets grew weak, the domestic market was basically flat year-on-year, and the overseas market did not see a significant pull, resulting in a sharp decline in the price of photovoltaic products from January to June. However, since the end of June, domestic market bidding , Household, and delivery projects have entered the bidding and construction period. Overseas markets in Europe, America, Japan, South Korea and other overseas markets have gradually recovered. Driven by downstream market demand, product prices have begun to gradually rise in early July. From July to August, there were three domestic polysilicon producers. Production safety accidents occurred in the company, and the two were concentrated in Xinjiang, where polysilicon companies were concentrated. Coupled with the extension of the supply cycle caused by the Xinjiang epidemic control, the supply of polysilicon fell in the short term. Under the situation of continuous growth in downstream demand, the supply exceeds supply. The situation has caused the price of polysilicon products to skyrocket, which is quickly transmitted to the downstream silicon wafers, batteries, and components." Jiang Hua said.

TrendFore said that the price of the photovoltaic market has generally risen, and silicon materials have risen sharply. This is mainly due to the improvement of the overall photovoltaic market demand and the supply bottleneck of the upstream silicon materials in the industrial chain. Specifically, the expansion projects of various downstream links of silicon materials have been implemented successively, and the newly launched capacity has increased the elasticity of demand; in July, the domestic production of polysilicon was concentrated in 11 companies, due to the continuous maintenance or equipment maintenance of 3 10,000-ton enterprises in the early stage Reduced load production, while continuous production accidents occurred in silicon material companies in northwestern China. In mid-July, Xinjiang, a key silicon material production area, was affected by the epidemic prevention and control. More than half of the production capacity operation and logistics transportation were blocked at the same time, and the silicon material capacity gap gradually expanded.

In response, Zhang Shiguo, vice chairman and secretary-general of the China New Energy Overseas Development Alliance, said in an interview with this newspaper that due to the epidemic and domestic polysilicon manufacturers’ own reasons, the balance of supply and demand of silicon materials in the upstream of the photovoltaic industry chain has been changed, resulting in the photovoltaic industry chain. The industrial supply of silicon materials, silicon wafers, solar cells and components exceeds supply, which has caused the price of the photovoltaic industry chain to continue to rise.

"In order to ensure the supply of large global orders, some companies have significantly increased the inventory of the photovoltaic industry chain, which has intensified market expectations. The production capacity of downstream modules and cells in photovoltaics has expanded too fast, and the expansion of upstream silicon materials has not kept up. The supply and demand imbalance between the upstream and downstream of the industrial chain and the supply chain has exacerbated the sharp price increase in this round of photovoltaic industry chain. From a global perspective, photovoltaic investment has intensified, capital has entered in large quantities, stock prices have skyrocketed, and oil and gas, building materials and mining companies have entered in large numbers. The GW-level country market has greatly increased, and the bidding for photovoltaic projects has increased from 100MW-level and GW-level projects, which has impacted market expectations and boosted the price increase of the industry chain." Zhang Shiguo further analyzed.

Photovoltaic market or accelerated reshuffle

The sudden price increase disrupted the pace of development of the photovoltaic market. What impact will the price increase of the photovoltaic industry chain have on the market and enterprises? Will the downstream photovoltaic power plant application end pay for the price increase on the manufacturing side?

According to Zhang Shiguo’s analysis, price increases have impacted the cost of industrial projects, making some photovoltaic parity online projects unprofitable or even loss-making, affecting project duration and delivery, and delaying the depth and breadth of the photovoltaic industry parity era; due to price increases, it may be possible It will affect the income of some photovoltaic EPC+F projects and impact the financial model of the project. Some photovoltaic projects may suffer losses; contrary to the transmission path of photovoltaic material price increases (silicon material-silicon wafers-cells and modules), this round of price increases impacts The transmission path of the impact is to impact power plant revenue, impact EPC+F expectations, impact the supply of components and cells, etc., which may lead to the investment rhythm of some power station projects, impact the expansion speed of photovoltaic capacity, impact the profitability of the industrial chain, and may cause some companies to lose money.

"At present, due to the impact of the price increase of the photovoltaic industry chain, the industry generally expects only a short-term impact. However, considering the expected recovery growth of the photovoltaic industry chain in 2021, the impact and impact of this round of price increases may be medium-term. The price increase in the industrial chain may accelerate the reshuffle of the photovoltaic market. Some leading companies will have a more prominent market position, some financially sound companies will get more market resources, and some companies with unobvious characteristics and weak competitiveness may be further marginalized. Due to the increase in photovoltaic prices, the international development of photovoltaics faces greater challenges, and the pressure to maintain the share of photovoltaic international trade and the share of photovoltaic international EPC has increased significantly. Some companies have difficulties in operating and may even have cash flow fractures, and industry restructuring and integration may accelerate ." Zhang Shiguo emphasized.

rendFore TrendForce believes that at present, the price increase of the whole industry chain has the greatest impact on the downstream component market, and all the intermediate links are in the price game stage.

Jianghua believes that this round of price fluctuations has opportunities and challenges for the development of the industry. Looking specifically at the challenges, the rise in module prices has led to a decline in the yield of domestic bidding and flat-price projects. Some photovoltaic power generation projects may choose to delay grid connection next year, which will have even more impact on distributed projects. Many projects have been shelved and are on the sidelines. The impact of the rapid increase in domestic industrial chain prices has also extended to overseas. Most overseas customers cannot accept the increase in component prices. Some of them have begun to postpone their procurement plans and projects. Global market demand may be less than expected.

"Overall, my country's photovoltaic industry has experienced several rounds of industry ups and downs, and its ability to resist risks has gradually increased. I believe that it can successfully tide over this industry crisis." Jiang Hua said, "Photovoltaic companies need to be based on themselves, take a long-term view, and formulate in line with their own development Demand’s future development strategy has successfully passed this round of industry crisis."