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spiritcraft

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Tuesday, January 15th 2013, 9:29am

IHS report on Q4 summary Tough first quarter, but prices to stabilize in 2Q2013

I think I saw this here but couldn't find it now. Regardless, it is a good read. There are actually sever similar articles that have been released in the last few days regarding grid parity, increasing demand and the spike in Q4 2012.


Tough first quarter, but prices to stabilize in 2Q2013
15. January 2013 | Top News, Markets & Trends, Industry & Suppliers | By: Shamsiah Ali-Oettinger

IHS reports that a surge in demand was seen in the final quarter of 2012 for PV modules, despite 3Q2012 having had low factory utilization rates across the PV supply chain. The first quarter will be tough but thereafter, a substantial increase in global demand is forecast to drive increasing revenues and stabilizing prices in the second half of 2013.

A new PV module shipment record of 11 GW was reached in the fourth quarter. But the global PV industry situation still remains critical according to IHS.
IHS January 2013

A new PV module shipment record of 11 GW was reached in the fourth quarter according to the IHS Solar Integrated Market Tracker from information and analytics provider IHS. However, the analysts warn, the global PV industry situation still remains critical and a substantial recovery of the supply-demand balance is not expected to occur before the second half of 2013.

Sharp rebound in 4Q2012
3Q2012 was another blow to the industry as IHS states. After a relatively strong second quarter resulting in global installations of 7.8 GW, markets softened again. “Installations in the third quarter amounted to just 7.5 GW. Wholesalers, EPCs, and PV suppliers were forced to carefully control their inventory levels due to falling prices and low shipment levels and production cuts were the consequence,” commented Principal Analyst Stefan de Haan.

In 3Q2012 average module capacity utilization fell to 49%, cell capacity utilization to 56%, wafer capacity utilization to a record-low 55%, and polysilicon capacity utilization to 63%. Module industry revenues were only US$6 billion as a result of falling prices in the thirs quarter. This is the lowest value since 2Q2009. The exit of solar companies reflected this.

“In the fourth quarter of 2012 global PV markets rebounded sharply. Very strong demand from Asia, with the surge driven largely by China and Japan, helped to compensate for sluggish demand in Europe. IHS estimates that global PV installations were 10.1 GW in the fourth quarter of 2012. In particular leading Chinese module suppliers benefited from the uptick in demand and shipped much more than previously expected,” explained de Haan.

In total, 11.0 GW of global module shipments are estimated for the fourth quarter of 2012 - a new record for the industry. As anticipated by IHS, average market pricing for crystalline modules declined to $0.65 per watt at the end of 2012, down from $0.70 at the end of September.

The point to note is that the price decline lost momentum in the course of the fourth quarter. Towards the end of the year some module prices even increased. Record-level shipments paired with stabilizing prices drove a profound recovery of revenues. According to the IHS Solar Integrated Market Tracker, fourth quarter 2012 module revenues grew by a stunning 42 percent quarter-over-quarter, reaching $8.5 billion.

Seasonal weakness

What does the first quarter of this year hold? IHS reports that suppliers are predicted to experience the usual seasonal weakness of global solar markets. Global PV installations are forecast to drop to 6.7 GW in this quarter. As a result upstream shipments and revenues will temporarily come under pressure again. With prices forecast to decrease by another 4-5% in the first quarter of 2013 (compared to the fourth quarter of 2012), module revenues will fall back to the critical levels of the third quarter of 2012—or even below. This will force more suppliers to review their business models and eventually leave the solar market. Previously IHS did predict that falling prices and consolidation will remain in 2013.

2013: Turnaround year

The first quarter will be tough but thereafter, a substantial increase in global demand is forecast to drive increasing revenues and stabilizing prices in the second half of 2013. IHS forecasts 35 GW of global installations in 2013, up 10% over 2012. Even though this figure is lower than previous years, it will drive a continuous improvement of shipments and revenues in the polysilicon to module supply chain throughout 2013. Recent positive signals from authorities in several key markets like China and France raise hopes for the recovery of the PV industry to happen even faster. “Whilst it’s too early to give the all-clear for the PV supplier industry, there is increasing indication that the year 2013 will mark the turnaround,” concluded de Haan.

odyd12

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Tuesday, January 15th 2013, 4:12pm

I got the e-mail from Stefan about Q4 report. He stated that model and numbers quoted are estimates. He has not seen or confirmed shipments with exception of receiving confidential data from leading suppliers, which supported his thesis, he use word qualitative to describe it. I doubt this estimate will hold. I wish it was, but I doubt. Readers here have actual data of shipments from Mainland China custom offices. Assuming what has been exported was equally shipped domestically as Explo suggests, it would indicate 2GW for domestic China in two months, amazing but impossible, considering that entire 2012 market in China was estimated to 2.2GW. Even if we accepted it as plausible that would leave 3.7 GW of combined shipments for China and exports in December, using 50% split, indicating 70% increase in export shipments from November. Summarizing 4GW export and domestic in October and November, 3.7GW in December Export and Domestic, this leaves 3.3GW for other operators. I do not see how would this be possible.

Pop2mollys

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Tuesday, January 15th 2013, 9:40pm

Solar module shipments surge in 4Q12, says IHS

http://www.digitimes.com/news/a20130116PR202.html


After a disastrous third quarter of 2012 featuring extremely low factory utilization rates across the entire solar supply chain, a surge in demand was seen in the final quarter of the year for solar modules. A new solar module shipment record of 11GW was reached in the fourth quarter according to IHS. Despite this positive sign the situation of the global solar industry remains critical and a substantial recovery of the supply-demand balance is not expected to occur before the second half of 2013.
Solar markets rebound sharply in the fourth quarter of 2012
The third quarter of 2012 dealt another blow to the global solar industry. After a relatively strong second quarter resulting in global installations of 7.8GW, markets softened again. "Installations in the third quarter amounted to just 7.5GW. Wholesalers, EPCs, and solar suppliers were forced to carefully control their inventory levels due to falling prices and low shipment levels and production cuts were the consequence," commented principal analyst Stefan de Haan. In the third quarter of 2012, average module capacity utilization fell to 49%, cell capacity utilization to 56%, wafer capacity utilization to a record-low 55%, and polysilicon capacity utilization to 63%. In parallel, prices continued the slide in the third quarter of 2012 resulting in module industry revenues of only US$6.0 billion - the lowest value since the second quarter of 2009. These difficult conditions were reflected in an increasing number of suppliers exiting the market.
"In the fourth quarter of 2012 global solar markets rebounded sharply. Very strong demand from Asia, with the surge driven largely by China and Japan, helped to compensate for sluggish demand in Europe. IHS estimates that global solar installations were 10.1GW in the fourth quarter of 2012. In particular leading China-basaed module suppliers benefited from the uptick in demand and shipped much more than previously expected," explained de Haan. In total, 11.0GW of global module shipments are estimated for the fourth quarter of 2012 - a new record for the industry. As anticipated by IHS, average market pricing for crystalline modules declined to US$0.65/watt at the end of 2012, down from US$0.70 at the end of September. Importantly, however, the price decline lost momentum in the course of the fourth quarter. Towards the end of the year some module prices even increased. Record-level shipments paired with stabilizing prices drove a profound recovery of revenues. According to HIS, the fourth quarter 2012 module revenues grew by a stunning 42% on-quarter, reaching US$8.5 billion.
Suppliers will experience seasonal weakness in the first quarter of 2013
In the first quarter of 2013 suppliers are predicted to experience the usual seasonal weakness of global solar markets. Global solar installations are forecast to drop to 6.7GW in this quarter. As a result upstream shipments and revenues will temporarily come under pressure again. With prices forecast to decrease by another 4 -5% in the first quarter of 2013 (compared to the fourth quarter of 2012), module revenues will fall back to the critical levels of the third quarter of 2012-or even below. This will force more suppliers to review their business models and eventually leave the solar market.
2013 will be the year of the turnaround
After a tough first quarter, a substantial increase in global demand is forecast to drive increasing revenues and stabilizing prices in the second half of 2013. IHS forecasts 35GW of global installations in 2013, up 10% over 2012. Although this level of growth is lower than previous years, it will drive a continuous improvement of shipments and revenues in the polysilicon to module supply chain throughout 2013. Recent positive signals from authorities in several key markets like China and France raise hopes for the recovery of the solar industry to happen even faster. "Whilst it is too early to give the all-clear for the solar supplier industry, there is increasing indication that the year 2013 will mark the turnaround," concluded de Haan.

odyd12

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Wednesday, January 16th 2013, 11:51am

It appears that market has not taken IHS forecast seriously. Stocks are down for two days now. I am curious what dynamic is behind it. Pricing certainly has stabilized in China and Taiwan is looking forward to increase prices. I am not overly optimistic on Q4 estimates from IHS, but fundamentals are shifting, nevertheless. The increase in short positions particularly in Trina and STP, JASO suggest that those companies are seen not to meet their guidance. Reduction of others, seem to actually confirm their ability to meet it. Exception LDK, which trades on its own rules.

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