MARKET analysts say photovoltaic cell and module makers are dropping the prices for their products after the US announced preliminary anti-dumping measures.
The preliminary US determination on anti-dumping and countervailing duties significantly weakened the market for Taiwanese and Chinese PV cells and modules. The price adjustments have affected upstream wafer and polysilicon prices as well, with wafer prices, already adjusted since August, projected to decline further in the future.
“Wafer makers are currently facing a difficult situation in which they have to try to fulfill the contracts requested by polysilicon makers while meeting the price-cutting demands from downstream clients,” said Arthur Hsu, research manager of EnergyTrend, a subsidiary of Taiwan-based market intelligence firm TrendForce.
Taiwanese wafer manufacturers have actively increased their OEM ratio to fill the unused capacity caused by the weak demand. In the meantime, wafer prices have dropped so low that they are below manufacturers’ break-even point.
“The break-even point was at US$0.54/piece for first-tier makers and around US$0.56/piece for second-tier makers. Certain OEM quotation even approached US$0.5/piece, down 10% compared to the break-even point. It will bring substantial impact to makers’ profits if they continue to raise OEM ratio. Yet, the high raw material costs caused manufacturing costs to remain high. That’s why wafer manufacturers can’t adjust prices according to market changes,” added Hsu.
The industry anticipates that the difficult market is only temporary, being optimistic about the second half of the 2014 financial year, anticipating increased demand from China and Japan.