SMM comments：What is the situation of the photovoltaic extrusion market after the Chinese New Year in 2024?

SHANGHAI, Mar 20 (SMM) - Strong domestic installed capacity in 2023 drove the rapid growth of photovoltaic extrusion production, with a year-on-year growth of more than 60%. While the rapid development of the photovoltaic industry has brought about an increase in aluminum consumption, it has also caused industry concerns about the demand for the photovoltaic market in 2024. So how is the photovoltaic extrusion market now?

In terms of production, photovoltaic extrusion processing companies quickly resumed production after the CNY holiday. The contribution of the increase in the operating rate of photovoltaic extrusion companies after the holiday to the recovery of the operating rate of domestic leading aluminum extrusion companies has been strong. According to SMM's research, some major manufacturers still maintain production during the Chinese New Year. Companies that closed during the holiday resumed production quickly after the holiday, with operating rates reaching 80% by the end of the first week after the holiday. Photovoltaic extrusion factories received urgent orders from downstream module factories in mid-January and rushed to produce before the CNY. Orders after the holiday mainly came from long-term orders and orders from module production schedules in March. In addition, in February, due to the holiday and production reduction of module factories, the order volume of some photovoltaic extrusion factories in East China was adjusted.

In terms of processing fees, the competition in the current photovoltaic extrusion industry and even the entire aluminum extrusion industry is fierce. Processing fees continue to decline, and profits of aluminum extrusion processing companies continue to compress. The photovoltaic frame processing fees in the industry are around 4,600 yuan/ton, and the average purchase price of first-line module factories is below the industry average price. 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 downstream aluminum has not decreased, but it is subject to the continuous decline of processing fees and the long settlement period. In the long term, aluminum extrusion companies will be less enthusiastic about the photovoltaic sector.

Overall, the photovoltaic extrusion market will recover quickly after the holidays in 2024, and demand will continue to maintain positive growth, and the amount of aluminum used will maintain a growth trend; however, factors such as the processing fees and overcapacity have led to a reduction in the profitability of photovoltaic extrusion companies. Barriers such as payment issues and raw material funds have made the orders concentrated at leading companies.