A-Share Solar Sector Surges; Price Bottom for Modules Near

• News
• 2024-08-18

On the morning of October 25th, the photovoltaic (PV) sector in the A-share market saw a significant surge, with the Wind Photovoltaic Index (866023) rising by 8.39% to 2264.31. In terms of individual stocks, TCL Zhonghuan (002129.SZ), Tongwei Co., Ltd. (600438.SH), Aikosolar Co., Ltd. (600732.SH), JinkoSolar Holding Co., Ltd. (002459.SZ), Longi Green Energy Technology Co., Ltd. (601012.SH), and Forente (601865.SH) all hit their upper limit, with Di Er Laser (300776.SZ) soaring by 20%, Trina Solar Co., Ltd. (688599.SH) increasing by 14.60%, Meyer Burger Technology Co., Ltd. (300751.SZ) climbing by 12.46%, and Jinko Energy Co., Ltd. (688223.SH) advancing by 10.67%.

According to the reporter's understanding, the surge in the PV sector today may be related to market rumors that integrated company Trina Solar is about to raise the price of its PV modules by 3 cents/watt. Combined with the recent industry association's call to "fight against involution" and the changing trend of bid prices in some module centralized procurement projects, some investors interpret this as a sign that the industry chain prices are about to hit bottom and rebound. In response to these rumors, Trina Solar replied to the reporter, stating: "We are still verifying the information."

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"Due to the abundance of market rumors, it is not clear what the future trend of our company's module prices will be," said several key photovoltaic companies listed on the A-share market. Unlike the formulaic process of silicon wafer pricing, the pricing of PV modules is market-driven, with sales prices being more flexible.

Industry analysts told the reporter from Yicai that recently, there has been a proliferation of "small essays" within the PV industry, including but not limited to the upcoming policy by the Ministry of Industry and Information Technology in November to restrict energy consumption, which has led to a more bullish market sentiment.

"Since October, market demand has not shown any signs of improvement, and manufacturers' bidding strategies have become increasingly aggressive, with domestic bidding prices continuing to decline. The irrational decline in prices is due to both supply and demand imbalances and the competition evolving into 'involution-style' development," said Changjiang Securities. Although the PV marketization level is high, supply policies can help accelerate the arrival of an inflection point. The Political Bureau of the CPC Central Committee pointed out the need to prevent "involution-style" vicious competition. Official departments and industry associations have repeatedly expressed views or introduced policies on the supply side of the PV industry, but the market is looking forward to more binding policies.

The Silicon Industry Branch of the China Nonferrous Metals Industry Association (referred to as "Silicon Industry Branch") believes that recently, there have been frequent releases of positive news related to the photovoltaic industry. Through supply-side structural reforms, the crystalline silicon photovoltaic industry is being guided back onto a normal track.

However, contrary to the "hot" market sentiment in the secondary market, the market transaction prices of the photovoltaic industry chain continue to bottom out under the influence of supply and demand contradictions. The latest industry data released by the Silicon Industry Branch shows that due to insufficient downstream demand, the overall price of silicon wafers fell last week.

Among them, the average transaction price of N-type G10L monocrystalline silicon wafers (182*183.75 mm /130µm/256mm) dropped to 1.05 yuan/piece, a decrease of 5.41%; the average transaction price of N-type G12R monocrystalline silicon wafers (182*210mm/130µm) dropped to 1.26 yuan/piece, a decrease of 1.59%; the average transaction price of N-type G12 monocrystalline silicon wafers (210*210 mm/150µm) dropped to 1.45 yuan/piece, a decrease of 3.33%.

"Due to the significant decrease in downstream photovoltaic module demand recently, the silicon wafer segment has been forced to reduce production, and the overall silicon wafer output has been compressed to nearly its limit," the Silicon Industry Branch estimated that the silicon wafer production in October will be adjusted to 45-46 gigawatts, a reduction of about 2 gigawatts from the initial estimate, and it is expected that there will be another reduction of about 2 gigawatts in November.

In terms of operating rates, the Silicon Industry Branch stated that in the past week, the operating rates of two leading companies have dropped to 45% and 40%, respectively, while the operating rates of integrated companies have remained between 50% and 60%, and the operating rates of other companies have dropped to between 30% and 50%.Additionally, the decline in prices within the photovoltaic (PV) industry chain is not limited to just the silicon wafer segment. Over the past week, the prices for the downstream battery and module segments have fallen once again. The latest prices disclosed by the Silicon Industry Branch show that the transaction price for M10 monocrystalline TOPCon solar cells has dropped to 0.265 yuan/watt, and the price for 182mm TOPCon bifacial double-glass modules has dropped to 0.68 yuan/watt.

"Although the prices for batteries and modules have declined this week, the overall transaction prices are concentrated, indicating that they have nearly reached the bottom. Downstream battery companies are considering large-scale stockpiling at the low prices, making it unlikely for silicon wafers to continue falling in price in the short term," said the Silicon Industry Branch.

This year, prices at every stage of the PV industry chain have plummeted significantly. According to statistics from the industry organization InfoLink, the price declines for the four major segments of the main PV industry chain—silicon material, silicon wafers, cells, and modules—are 38%, 50%, 43%, and 29%, respectively.