What will be the situation of the PV extrusion market after CNY in 2024? [SMM Review]

Driven by strong domestic installed capacity in 2023, PV extrusion production was up by 60% YoY. The rapid development of the PV industry boosted aluminum consumption, it has also caused industry concerns about the demand for the PV market in 2024. So how is the PV extrusion market?

In terms of production, PV extrusion processing companies quickly resumed production after the holiday. The contribution of increase in the operating rate after the holiday cannot be ignored. According to SMM's research, some major manufacturers maintained production during CNY. Companies that have a CNY holiday resumed production quickly after the holiday, with operating rates reaching 80% by the end of the first week after the holiday. Compared with before the holiday, PV extrusion factories received urgent purchase orders from downstream component factories in mid-January and rushed into production before the year. Orders after the year mainly come from long-term orders and orders from module production schedules in March. In addition, in February, due to the production reduction of component factories, the order volume of some PV extrusion factories in east China was adjusted.

In terms of processing fees, fierce competition in the PV extrusion industry and even the entire aluminum extrusion industry weighed down processing fees, and profits of aluminum extrusion processing companies continued to shrink. The PV frame processing fees in the industry are around 4,600 yuan/mt, and the purchase price of first-line component factories is below the industry average price and is expected to continue to decline, and SMM continues to track it. According to SMM research, module manufacturers scheduled module production of 30GW in February and 54GW in March. It is expected to maintain positive growth in April. It can be seen that the demand for aluminum has not decreased, but it is subject to the continuous decline of processing fees and the settlement period. In the long term, aluminum extrusion companies are less enthusiastic about the PV sector.

Overall, the PV extrusion market recovered quickly after the holidays in 2024, and demand will continue to maintain positive growth, and the amount of aluminum used will continue to grow; however, factors such as fierce competition weighing down processing fees and overcapacity affected the profitability. Due to payment collection and raw material fund, the operating rate of leading enterprises remained high.