PV module production for July may rebound MoM, and HJT module producer orders are positive

According to SMM statistics, China's PV module production in June was approximately 47.7GW, down 5.1GW from the previous month, a decrease of 9.6% MoM; it increased by about 25.6% YoY. From January to June 2024, China's cumulative PV module production was approximately 278.8GW, up 59.8GW YoY, an increase of about 27.3%.

In June, the PV module market faced intense competition, with low-price competition leading to varying product quality. The prices of low-efficiency modules repeatedly broke through previous highs. The cause of this phenomenon was the temporary imbalance between supply and demand of modules. Demand side, since April, the YoY decline in domestic PV new installed capacity gradually narrowed, with PV installed capacity growing MoM from April to June. The cumulative newly installed PV capacity from January to June was estimated to reach 104GW, up 33% YoY. However, although the new installed capacity showed an upward trend, the increase was small. This year, domestic PV end-user demand was still supported by centralized PV. The slight relaxation of the red line (also known as the maximum requirement) for the utilisation rate of centralized photovoltaic projectsslightly stimulated the capacity that could be connected to the grid. However, the distributed PV market gradually weakened, with low electricity prices, congested grid capacity, and fluctuating PV power generation returns all impacting the new installed capacity. Overseas end-user market demand declined MoM, with the surge and volatility of renewable energy generation lowering electricity market trading prices. Grid congestion also became a hidden hazard, and the shipment of modules slowed down. With overall demand relatively weak, PV module production saw high growth from March to May, leading to an upward inventory trend. Some producers' inventory levels exceeded safe inventory levels, increasing destocking pressure, ultimately causing module producers to start lowering production. In June, together with the impact of changes in overseas trade barrier policies on overseas base production, the actual output of module producers showed a MoM decline.

In July, domestic centralised procurement orders saw concentrated delivery demand, and some PV module producers raised their planned production, while most companies' operating rates remained flat. Worthy of attention is that HJT prices began to decline significantly with the downward trend of the PV industry, improving cost performance, and some end-users started considering the use of HJT modules, increasing centralised procurement demand. There is some delivery demand for HJT modules in July, with expected order volumes rising, and HJT module producers also raised their production. Small manufacturers, due to fewer orders, mainly focus on outsourcing orders, maintaining low operating rates. However, the risk of module inventory accumulation still exists, limiting the increase in production. Overall, the expected PV module production in July is 48.3GW, up 0.6GW MoM, an increase of about 1.2%.