The photovoltaic track suddenly broke big news.
Near midday, the A-share photovoltaic sector suddenly rose in volume, with King Kong PV once rising by more than 15%, and stocks such as Risen Energy, JA Technology, and Ancai Hi-Tech followed suit. On the news side, a "Notice on Convening a Symposium on Preventing Vicious Competition in the Industry" (hereinafter referred to as the "Notice") went viral in the industry, and the China Photovoltaic Industry Association held a symposium on preventing vicious competition in the industry on the morning of October 14 in Shanghai, with the theme of "orderly resolution of supply and demand imbalances and clearing excess capacity".
In the afternoon, the three major A-share indexes strengthened, with the ChiNext Index, the Shanghai Index, and the Shenzhen Component Index rising more than 2% at one point. Hongmeng, military industry, chemical debt, mergers and acquisitions and restructuring and other directions rose in the first place, and nearly 5,000 stocks rose in Shanghai, Shenzhen and Beijing.
Analysts pointed out that the convening of this meeting means that the problem of overcapacity in the photovoltaic industry has attracted attention in the industry, and the market expects that the industry's leading enterprises may reach a consensus on anti-involution, stop price reduction dumping, and even reduce production, which is undoubtedly good news for the current photovoltaic industry.
Looking ahead, some institutions believe that the industry has entered the bottom range and is waiting for supply and demand to rebalance. Due to the imbalance between supply and demand, the price has fallen sharply, and the whole industry has basically entered a state of loss, and the new production capacity of all links of photovoltaic has been basically suspended, although the total supply is excessive, but the dynamic production and sales are close to equilibrium, and the further downward space of the industrial chain prosperity is limited, and the profits of each link are expected to be marginally repaired from 2025.
PV soars
Near noon today, the A-share photovoltaic sector suddenly rose, and King Kong PV once rose by more than 15%, and as of 14:30, the increase fell back to 7.74%; Guosheng Technology's daily limit, Risen Energy, JA Technology, Ancai Hi-Tech, Yubang New Materials, Jolywood, Canadian Solar and other photovoltaic stocks also collectively strengthened.
On the news side, a "Notice on Convening a Symposium on Preventing Vicious Competition in the Industry" (hereinafter referred to as the "Notice") has gone viral in the industry, which shows that the China Photovoltaic Industry Association held a symposium on preventing involution vicious competition in the industry in Shanghai on the morning of October 14, with the theme of "orderly resolution of supply and demand imbalance and clearing excess capacity".
According to the notice, the price of photovoltaic products has continued to fall in recent times, and the current mainstream product price has been significantly lower than the production cost, and the industry has fallen into a vicious situation of competition below the cost price. In order to prevent involution vicious competition, smooth the exit channels of backward and inefficient production capacity, maintain the order of fair competition in the photovoltaic market, and guide the healthy development of the industry, entrusted by the backbone enterprises in the meeting, the China Photovoltaic Industry Association plans to organize a symposium on preventing involution vicious competition in the industry in Shanghai on October 14 to jointly discuss relevant measures such as orderly resolving the imbalance between supply and demand, clearing excess capacity, etc.
According to 21 Finance, photovoltaic giant LONGi Green Energy responded that the company participated in the symposium, and there is no news on the specific content of the meeting for the time being. The current production schedule of the industry is adjusted according to the relationship between market supply and demand, and no party requires a reduction in production. The current situation is caused by the mismatch between supply and demand in the industry, and the industry has not improved significantly, but through market means, the industry will gradually improve, but it will take time, and there is no particularly obvious change at present.
Analysts pointed out that the convening of this meeting means that the problem of overcapacity in the photovoltaic industry has attracted great attention in the industry, and the market expects that the leading enterprises in the industry may reach a consensus on anti-involution, stop price reduction and dumping, and even reduce production, which is undoubtedly good news for the current photovoltaic industry.
Since the beginning of this year, the imbalance between supply and demand in the photovoltaic industry has become more and more severe. Wang Bohua, honorary chairman of the China Photovoltaic Industry Association, recently predicted that the new global photovoltaic capacity in 2024 is expected to be 390GW-430GW, of which China's new photovoltaic installed capacity is expected to be 190GW-220GW. According to the Ministry of Industry and Information Technology, in the first half of 2024, China's module production will reach 271GW.
In addition, according to the estimation of the photovoltaic industry standard announcement, enterprise information and industry associations, in the first half of 2024, the national output of photovoltaic polysilicon, silicon wafers, cells and modules increased by more than 30% year-on-year, and the export volume of photovoltaic modules increased by nearly 20% year-on-year.
This means that the output in the first half of the year alone has exceeded the mainland's estimated installed demand for the whole year, and it is still under the condition of low capacity utilization. Assuming that the same output is maintained in the second half of this year, the annual supply of the mainland will reach about 1.3 times the global installed photovoltaic demand, and the severity of overcapacity cannot be ignored.
The latest report of CITIC Futures pointed out that as of mid-2024, the nominal production capacity of all links of the main material has exceeded 1000GW, and the operating rate of the industry has dropped to 45%-65%, and the pattern of total supply surplus will likely continue in the coming year.
Prices fell across the board
Affected by the imbalance between supply and demand, the price of the photovoltaic industry chain has fallen sharply. According to the China Photovoltaic Industry Association, in the first half of 2024, domestic polysilicon and wafer prices fell by more than 40%, and cell and module prices fell by more than 15%.
In the third quarter of this year, the price reduction trend of the entire PV industry chain has not ended, among which the price of polysilicon has dropped significantly in the early stage, and has fallen below the cost line, so the price change in the third quarter is small. P-type wafers also bottomed out in the third quarter due to a large price drop in the early stage. The price of N-type wafers continued to fall, and the price of 210mm/130μm mono-Si N-type wafers has halved this year, becoming the product with the largest decline this year.
Yao Yao, chief analyst of Guojin Securities, pointed out that the current photovoltaic production capacity is slower than expected, and many photovoltaic companies still insist on production in the face of losses and tight cash flow, which is based on the judgment that the prosperity is expected to reverse in the short term.
Su Chen, director of the Guojin Securities Research Institute, believes that the general loss situation will not be the norm in the photovoltaic industry, and some second- and third-tier enterprises that do not have cost advantages and technical advantages will face the pressure of elimination, and the industry concentration will be increased after this cycle.
Li Dongsheng, founder and chairman of TCL, recently said that the more you sell, the more you lose, because you sell at a loss, and the industry market system is distorted, and this phenomenon is definitely unsustainable.
Looking ahead, CITIC Futures believes that the industry has entered the bottom range and is waiting for supply and demand to rebalance. Due to the imbalance between supply and demand, the price has fallen sharply, and the whole industry has basically entered a state of loss, and the new production capacity of all links of photovoltaic has been basically suspended, although the total supply is excessive, but the dynamic production and sales are close to equilibrium, and the further downward space of the industrial chain prosperity is limited, and the profits of each link are expected to be marginally repaired from 2025. For photovoltaic companies, it is an effective measure to reduce malignant involution, maintain healthy cash flow, seek suitable overseas opportunities, and strengthen the research and development of new technologies.