The Operating Rate Of PV Modules Is Only 20%, And Solar Cell Manufacturers Have Begun To Reshuffle!

(I) PV Module

According to multiple research, module manufacturers have the greatest pressure in the main PV industry chain. It is worth noting that around the Spring Festival, the overall price of modules?is in the range of 0.8-0.9 yuan / W($0.099-0.111/W FOB), and even the price has dropped to 0.79 yuan / W. ($0.0978/W, FOB)

According to the PV industry situation in China, 1 yuan per watt is the cost line of PV?modules, and it is difficult for the whole industry to make profits at this price. This means that in the New Year, PV?module enterprises are generally facing a more production-more loss situation. Facing such pressure, PV module?enterprises have been significantly differentiated, small and medium-sized manufacturers have reduced production, or even stopped production, and orders and business are more concentrated in the hands of big factories. According to authoritative industry data from Infolink, the overall operating rate of PV module manufacturers in China was only 23% in February, compared with 49% for the TOP 9 PV module companies.

In terms of production, according to SMM, the domestic PV module production in February may be lower than 30GW, down about 20% from January.?In January, the domestic PV module production was about 35.5GW, down by 21.6% from December.

(II) Solar Cell

As for the PV module?upstream solar cell supply, manufacturers are also not easy. "The overall operating rate of the solar cell?is not high, especially since some small enterprises have directly shut down."A silicon wafer enterprise executive?said he had heard that some solar cell?companies had been "washed out" by this round of industry.

These enterprises?reshuffle?out?belong to the type of small-scale or insufficient capital flow. Public information shows that in 2023, the PV?solar cell supply?will expand greatly, and the annual total production capacity is forecast to be as high as 151.4 GW. The big reshuffle of the solar cell?supply chain is mainly due to the serious excess solar cell?capacity and low profits. These troubled companies are paying the price for the aggressive expansion of the previous two years.

In order to reduce costs, some solar cell?companies have started the Spring Festival holiday in advance, and some factories have been off since January. An industry source told us?that a unicorn solar cell?maker "gives employees half a month off" during the Spring Festival. And the first-line big factories, although the relevant production line also stopped part, even during the Spring Festival are?still in normal production. The silicon wafer executive said he had the information that large solar cell?plants were operating at around 50 percent. In addition to the production reduction and holiday of solar cell?factories, another major reason is the closure and upgrading of a large number of PERC capacities.

In the past year, n-type replaced p-type capacity rapidly. According to Infolink statistics, as of early February 2024, PERC production capacity has been determined to close/stop production of projects reached 58GW. At the same time, the planned upgrade capacity also reached about 86GW. Also, according to anonymous sources, a certain factory even has sourced p-type product lines out to the OEM enterprise.

However, even for the n-type production line, major solar cell?manufacturers have cut production during the Chinese New Year. A third-party forecast that the industry solar cell?production in February is around 42GW, but the actual output is expected to fall below 40GW. It is worth noting that the industry is relatively optimistic about starting expectations next month.

A market leader from a PV?company told us, " Since last Friday, some solar cell?companies have begun to step up their efforts to resume work. Industry operating rate is expected to increase by 10% -15%.” The person also said, " According to the usual practice, the industry generally in March begins to pick up, and to April, May,?the industry will enter the peak season. However, according to this year's situation, even in April and May, it is estimated that the top 10 solar cell?manufacturers' production capacity is unlikely to appear 'fully open' situation.”

(III) Silicon Material

Compared with the module and solar cell?production lines, the production schedule of silicon wafer production lines during the Spring Festival is relatively normal.

For example, some enterprises take shift non-stop furnace systems, the main reason is that the early solar cell?storage and their own inventory pressure are not large. However, the Spring Festival production in February, made the silicon wafer inventory level constantly rising."Now they are also in some panic," the market official said. " In fact, the industry inventory of 2.3-2.5 billion silicon wafers is still at a normal level, but if the peak season is not prosperous, there will be a risk of price drop and production reduction in the future."(China Energy network note: the person mentioned the industry inventory scale, and the third party of the data is different, a third party of the silicon wafer survey situation is about 1.5-1.7 billion pieces.）

In contrast, the upstream polysilicon, crystal-pulling enterprises have the least pressure.?Overall, the production line operating rate of the upstream of the industrial chain is generally better than the downstream chain. During the Spring Festival holiday, the polysilicon mainstream enterprises are in normal production, only some enterprises are still in the maintenance or shutdown of the technical transformation cycle, the overall impact on supply and demand. Industry insiders interviewed by China Energy network said that the overall operating rate of the crystal production line is about 80%, mainly because the degree of crystal overcapacity is not serious, and the profit is higher than the solar cell?factory.

But for the whole year, silicon is also under surplus pressure. Lu Jinbiao, deputy director of the silicon industry expert group of China Nonferrous Metals Industry Association, has predicted that the amount of silicon production capacity will reach 3.68 million tons by the end of 2024, even if some of the backward production lines are stopped, the total production capacity is expected to reach 3 million tons. From the installed capacity demand, the silicon surplus will be relatively high in 2024. ?Under the pressure of overcapacity, the entire PV?industry is now jittery. Some predict that three mid-size manufacturers may go bankrupt this year, given cost pressures.

In this forecast, some industry insiders said "will not so fast", but if the industry continues to slump this year, " I am afraid there will be a lot of small and medium-sized enterprises that really can not insist.”

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