Solar Modules – General views
The first quarter of the 2014 has the potential to become the largest quarter since Q2 2013, reaching around 4.6GW
Using CEDR data for the Q4 2013, the number of modules delivered to Chinese market accounted for 54% (CN7*) of the total volume of actual modules shipped, some 2.2GW were delivered to China from the 4.1GW overall reported.
Q1 guidance of 3.7GW against Q1 CEDR for CN7, the global delivery estimate is 2.7GW; therefore the proportion of modules delivered to China versus export is around 27% or equal to 1GW. There is a 65% reduction in the domestic market in comparison to the fourth quarter.
For CN7, Q1 guidance of 3.7GW is a 48% increase over 2013 shipments of 2.5GW. Using the same analysis method, CEDR data showed 2.3GW sent globally, leaving module shipments to China as only 200MW during Q1 2013.
Q1 2014 has a 400% increase in domestic volumes for CN7 companies in comparison to 2013. One can stay concerned with perception of demand reduction in China, but the consideration must be also given to capacity utilization associated with top range of revenue offered during the first quarter of the year. In our view, there is an expectation of 42% increase in global deliveries in comparison to Q4. Since the Q1 2014 guidance is only 10% lower than Q4 2013 shipments for CN7 companies, our original expectation was for a potential of beating those figures, accompanied by real possibility of ASP growth. Based on the recent announcements from JA Solar, Yingli and Trina, only JA managed to beat, while other two adjusted down their volumes. In case of Trina the adjustment came from area, which performed strong in first two months of the year.
While February’s overall volume of 1,298.9GW, was a 25% decline compared to January, and even 1.7% drop from February 2013, Mainland grew at 11% and “Others” at 13% on year –to-year comparison. The best position was CN7, gaining 16.8%. CN7 had 50% of the total amount of module exports out of China in the first two months of 2013. In 2014, the relationship is 54%.
The highest volume during Q1 2013 happened to be in March. The same expectations are for March 2014, foreseeing 1GW globally, based on tremendous finish to Japan’s last quarter of the year, and completion of large shipments to the US, prior to potential impacts starting in April.
Going back to markets during February, in the area of significant size, North America grew 28% month over a month; all other markets have seen decreases. In a year over year assessment, North America and Asia are up by 173% and 81% respectively. CEDR currently recognizes 73 countries, as a point of destination for CN7 companies; this is why the heading “ROW” shows 52% less volume year over year.
In the group of countries with greater than 10MW destination, in month-over-month comparison, February had the US and Germany gained 31.4% and 129% respectively. Yearly comparison had increases in the US, Japan and Thailand at 170%, 130% and 288% respectively.
In first two months of 2014, we see 48% of the overall market in Asia, 22% in Europe and 20% in the North America. This is a difference from 2013, where Europe was at 53%, Asia at 25% and North America at just 7%.
In the same timeframe, in the top 10 country category, Japan represented over 42% overall size. Top 10 had a 90% of all deliveries and showed 4% more volume concentration than Q4.
The UK was the number three destination after Japan and the US, with volume facing 92% growth year over year. The situation in the US market is also extremely interesting. The impending end to a second trade-investigation, potentially leading to new tariffs, appeared to motivate US market to an explosion of deliveries. The US is 21% of the total amount among top 10 destinations.
Solar Cells – General views
172MW of cells were delivered during February, a drop from January’s 206MW, and an increase from 165MW delivered in December. Top destinations during February were South Korea, Canada and India, which is the repeated pattern of January; same can be said about top two shippers during the month, JA and Motech. Nicesun PV shared third place in February with Tainergy, a Taiwanese company primarily known for its modules. The average price for JA cells during February was $0.40 per watt, just a fraction of an increase from January.
During January (one month behind Chinese data), Taiwan delivered over 654MW of cells, with largest destination, China having 320MW. In similar statistics to December, a price per watt was also $0.40. It appears that top two destinations, in addition to China, Japan and Germany, have the same pricing levels while Japan had a volume growth in February to 91MW. Contrary to this, Malaysia experienced a significant increase in price and deliveries from $0.39 to $0.47 per watt and volume growth of 17% to 47MW. Malaysia also represents a large destination for wafers from China, having 57MW during February and 73MW in January. The volume and pricing growth for Taiwan-made cells may be a consequence for the country to play a role in in counterbalance measures to potential US tariff. Malaysia along Thailand could be a next cell hub or maybe even a module assembly point, with a certain level of experience in manufacturing solar products.
Solar Wafers – General views
Wafer deliveries were the lowest in three months at 639MW compared to 770MW during January and 672MW in December. The same sort of top four destinations is seen here with Taiwan, Malaysia, South Korea and Philippines.
Top companies in the sector were GCL-Poly, Longi, and Canadian-GCL joint venture; the joint venture managed actually to increase its volume in February while other companies experienced reduction. Top three had 315MW delivered while January had 400MW. Canadian-GCL union added 13MW above January, almost entirely moving this amount to Taiwan.
Average price for wafer from ReneSola was at $0.24 a slight decrease from January. ReneSola delivered only 21MW of wafers during the month, a 67% decline from July 2013, confirming the change in a business strategy to focus on modules sales using own wafers.
US listed-Chinese Solar Companies (CN7) –General views
Canadian Solar and Trina have grown its deliveries month-over-month at 17% and 6% while other companies had experienced a decline with ReneSola, Yingli having 32% cut and Hanwha SolarOne at 25% versus January.
For the month of February Trina, Canadian and Yingli led. For the two months of the quarter, Trina, Yingli and Canadian are leading. Having one month left, Yingli has over-delivered its Q4 volume, and Trina got extremely close to do so. Even more surprising conclusion was JA Solar, delivering more modules than last two quarters. JA has also the most dramatic increase in module shipments among CN7 in year-over-year comparison, realising 90% gain. Hanwha, which brought a reduction in February’s volume versus January, still had a second highest growth with 38% quarterly increase year over a year, while Jinko was third with 29%.
Reviewing guidance for Q1 and the domestic market for the CN7, both Jinko and Hanwha seem to have currently the closest percentile of the domestic market contribution to the fourth quarter, when compared CEDR to total shipments. Still, small domestic contribution for Hanwha could help the company to achieve higher ASP if the GADP trend observed thus far in the quarter, remains on track in March.
In case of Jinko GADP is only recovering in February, but remains below the Q4 level. Depending on how large is domestic penetration in Q1; ASP could get depressed in comparison to Q4 since module prices in China dropped.
GADP Prices and Outlook
Yingli has the most significant GADP jump from Q4 to Q1, even when February to January shows a decline. In the same fashion, Trina’s GADP elevated quarterly GADP, which remains higher than Q1. Both companies flipped volume to Japan from the US in a period of one quarter.
Hanwha has been so far even to Q4, but the trend is up in February. More shipments to Belgium, and one cent higher GADP in Japan made a positive impact here. In spite, the potential of an increase in wafer prices due to poly costs rising, Hanwha can still have higher GM on non-poly processing. Higher global shipments in combination with potentially better OEM margins and still quite spacious room for reduction of high processing cost could help Hanwha reaching targets in line with its 15% GM prediction.
Finally, JA Solar looks quite attractive, in module shipments and GADP for the quarter. February showed a bit softening in monthly GADP, but overall global size should provide JA an improvement in ASP and grow the company to a higher GM bracket than Q4. Dominating Japan, JA enjoys stable prices there. If the company is able to move up the volume in March, the higher GADP will produce ASP increase, as well as grow revenue generation due to the abundance of modules in the ratio of modules to cells.
Thank you
SPVInvestor Research - Robert Dydo, Jason Tsai
CEDR Solar Exports information can be found here link
What is included:
- Country and volume
- currently 73 countries identified, specifically for US-listed companies
- 34 Chinese corporations included in the report.Taiwanese cell and module exports by destination, volume (pieces) and dollar value,
- MW Chinese customs declared prices by company and destination for module, cell and wafer
- Polysilicon volume imports by a company and sourcing country
- Mainland China's quotation price
- Color charts and price graphs
- For the full sample of the CEDR please contact This email address is being protected from spambots. You need JavaScript enabled to view it.
*CN7 includes: Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE: YGE), Canadian Solar Inc. (NASDAQ: CSIQ), Trina Solar Limited (NYSE: TSL), JA Solar Holdings Co., Ltd. (ADR)(NASDAQ: JASO) and ReneSola Ltd. (ADR)(NYSE: SOL), JinkoSolar Holding Co., Ltd.(NYSE:JKS), Hanwha Solarone Co Ltd (NASDAQ:HSOL)
