Solar panels lead losses in supply chain this week as serious competition added to the mounting price tension in the regional solar markets. Amid the expanded capacity in SEA, top tier Asian solar panel makers can gain access to the US market without high tariff rates and are offering strategic price reductions in order to compete with the western rivals and tier-1 Chinese manufacturers for more market shares. Recently, Hanwha Q-cell has been the dominant player that fuels price competition over major solar markets in EU, Japan and most noticeably in the US. Therefore, as Chinese module makers are also forced to join the price war, solar panel prices in these regions are further driven down by such competition. Moreover, solar panel prices in EU and US are further pressured due to thinning trading ahead of the year-end holiday period.

Solar panels lead losses in supply chain this week as serious competition added to the mounting price tension in the regional solar markets. Amid the expanded capacity in SEA, top tier Asian solar panel makers can gain access to the US market without high tariff rates and are offering strategic price reductions in order to compete with the western rivals and tier-1 Chinese manufacturers for more market shares. Recently, Hanwha Q-cell has been the dominant player that fuels price competition over major solar markets in EU, Japan and most noticeably in the US. Therefore, as Chinese module makers are also forced to join the price war, solar panel prices in these regions are further driven down by such competition. Moreover, solar panel prices in EU and US are further pressured due to thinning trading ahead of the year-end holiday period. Similarly, despite the strong growth in India, solar panel prices also drop mildly this week following the global downtrend. Nevertheless, solar panel prices in China remain stable this week with solid domestic demand and stabilized exchange rate as most Chinese module suppliers are rather optimistic regarding the outlook in 1H17. As the result, both multi-crystalline and mono-crystalline solar panel prices continue to decline moderately this week.

Both mono-crystalline and multi-crystalline cell prices remain under downward pressure from ample supply amid continued weakness in downstream markets. Weakening downstream prices limits the purchasing power of solar cell buyers that solar cell makers have to offer more competitive prices in order to win the orders. Moreover, as most solar cell makers retrieve their utilization rates near full, the ample supply of solar cells compounded with pressures of year-end sales goals are forcing solar cell makers to lower price quotes further. In addition, because Chinese module makers have released slightly-lowered demand forecast for January, the building up inventory pressure is another key that contributed to the price slump as well. Hence, both multi-crystalline and mono-crystalline cell prices decline continuously following the persistent price slump in the downstream.

Multi-crystalline wafer prices remain vulnerable to corrections amid depressed downstream prices. Although the top tier Chinese multi-crystalline wafer supplier has lowered price quotes for January, the scope is rather limited in contrast to the drop of multi-crystalline cell price. The reasons behind this phenomenon are that the demand for multi-crystalline wafer remains solid as most solar cell makers remain high utilization rates. Most importantly, since most multi-crystalline wafer makers anticipate the demand to warm up again after Chinese lunar New Year, they intend to lower price quotes conservatively at this moment. On the other hand, mono-crystalline wafer prices stay immobile this week as RMB depreciation has been temporarily relieved this week. Thanks to the solid demand and high order visibility lasting at least to the Chinese Lunar New Year, mono-crystalline wafer supply remains tight. However, despite the supply shortage of mono-crystalline wafers, mono-crystalline wafer price is unable to ascend as inhibited by the long streak of losses in the downstream sectors.

Regardless of downstream price slump, polysilicon prices continue to improve incrementally this week. Potential supply restriction, ADCVD review against Korean imports, is constantly blamed for rapid price growth in China - surveys even suggest this is the key reason why polysilicon prices have not fallen recently despite the downstream prices weakness. Chinese polysilicon manufacturers are still trying to improve their price quotes on the domestic market, as their stock levels are now reduced and they expect good order visibility even after the Chinese New Year holiday period. Nonetheless, since polysilicon price in China has risen near saturation points, the momentum of polysilicon growth also seems to temper. In markets outside China, although there are no ambitious price hikes being observed, the volumes of transactions are very low as most buyers as well as sellers are waiting for the post-holiday return to resume price negotiations and purchasing activities. As a result, polysilicon prices in overseas remain immobile thanks to the holiday lull.