The European Commission announced that it will end its anti-dumping measures against solar photovoltaic cells and components in China from midnight on September 3, 2018. This is good news for PV module prices in the European market, but we do not think this will be the price of global PV modules. And the short-term demand of the EU has a significant impact.
Historical reason
The European Commission's anti-dumping complaint filed by the European Photovoltaic Manufacturers Union 2012 established the Minimum Import Price (MIP) for importing Chinese components in 2013. Since then, the EU has conducted several reviews of the MIP, as of Before the MIP expires, the minimum import price requirements for polycrystalline cells and components are 0.18 and 0.3 euros per watt, respectively, and the prices of monocrystalline cells and components are 0.21 and 0.35 euros per watt, respectively.
Responses
In order to avoid tariffs, Chinese PV module manufacturers quickly established third domestically produced energy (mainly in Southeast Asia). As of May 2018, Chinese manufacturers and South Korea’s Hanhua Q Cells and Canadian-based Artes (two Both have a large capacity in China. The photovoltaic cell and module manufacturing capacity that has been put into production overseas has reached 13.5GW and 19GW respectively. These companies can continue to supply batteries and components made in China, including the US and Europe (before MIP cancellation). Countries and regions that set trade barriers. At the same time, China's rising labor costs can be avoided.
MIP impact
The MIP setup was largely unsuccessful because European producers did not benefit from this measure as expected. In 2018, there was almost no remaining capacity in Europe. The last major PV module manufacturer in Europe - Germany SolarWorld filed for bankruptcy in early 2017. According to media reports, the company resumed production in the fourth quarter of last year, but then declared bankruptcy again.
According to the European large-scale power plant PV project developers, the price of PV modules has been as low as 0.25-0.26 euros per watt before the MIP is cancelled, far below the minimum price requirement. Although Chinese component manufacturers have managed to bypass trade barriers, they are produced in China. Compared to components, European developers still have to pay a premium when they buy components from Southeast Asia.
The biggest beneficiaries of the MIP cancellation are the large-scale power plant project developers (such as developers in Spain, Germany and Greece) who have already obtained projects through tendering and are about to purchase equipment. With the cancellation of the minimum import price, these projects are developed. The company can obtain a large number of inexpensive PV module supplies in China.
Market demand
On the demand side, according to our forecast before the MIP cancellation, the new installed capacity in the European market will double from 6.6GW in 2018 to 13.4GW in 2019, mainly due to the expected increase in large power plants from 2.4GW in 2018 to 2019 in 8.1. GW. Due to the elimination of trade barriers, lower component costs are likely to drive more demand for unsubsidized and large commercial rooftop projects, but given its size constraints, this has little impact on our short-term European demand forecast.
The cancellation of the MIP is also good news for Chinese component manufacturers, as they can supply their Chinese-made components to most of Europe's large power station projects (except for French projects, because the French government has restrictions on the carbon footprint of the components) We expect Chinese manufacturers to adjust their components in Southeast Asia to other markets such as India and the US.
Globally, PV modules will continue to be oversupply in 2018, as European market demand is not expected to increase this year. Therefore, the elimination of European trade barriers will not affect global component prices in 2018 and 2019. In the Chinese market, the new PV installed capacity is expected to shrink sharply under the previous policy changes. We expect China's polycrystalline module prices to drop to US$0.24 per watt by the end of the year.
In July, India announced a protective tariff on photovoltaic module batteries and components imported from China, Malaysia and developed countries. The first year tax rate was 25%, but the measure was temporarily put on hold. (The Supreme Court of India agreed to the measure in September. Execution)
At the same time, some large Chinese manufacturers are still implementing capacity expansion plans, including Jinko Energy, GCL-Poly and Tongwei. The increase in production capacity will help them further reduce unit costs and increase supply capacity, while less efficient suppliers will Will be squeezed.
a set of data
$0.35/W
MIP cancels the minimum price requirement for pre-polycrystalline components
$0.29/W
Component prices obtained by European project developers before MIP cancellation
19GW
Chinese manufacturer's third-country component manufacturing capacity
