Chinese Solar Makers Sinks into the Red on Price Falls Across Supply Chain
Major listed solar manufacturers in China are expecting net losses for the first half of 2024 after price drops across the solar supply chain wiped out net profits made a year ago, according to company announcements over the past week.
Longi Green Energy Technology, among the world’s top three solar module sellers, is expecting a net loss of 4.8 billion yuan ($673 million) to 5.5 billion yuan for 1H-2024, a sharp reversal from the 9.18 billion yuan net profit it made a year ago.
Tongwei Solar, a major polysilicon manufacturer who is also a top five module seller, expects a net loss of 3 billion yuan to 3.3 billion yuan for 1H-2024 after having reported a net profit of 13.27 billion yuan a year ago.
JA Solar, another top five module seller, expects a net loss of 0.8 billion to 1.2 billion yuan compared to net profit of 4.8 billion yuan over the same period.
TCL Zhonghuan, a major wafer producer that also sells modules, is expecting a net loss of 2.9 to 3.2 billion yuan for the first half of the year compared to a net profit of 4.53 billion yuan a year ago.
All four companies attributed the reversals to imbalances in supply-demand fundamentals and the resulting price falls across the solar supply chain.
JA Solar, Longi and Tongwei all noted that their module sale volumes rose sharply from a year ago but net losses were incurred nonetheless due to the severe price falls.
Prices of polysilicon in the Chinese domestic market averaged 53.528 yuan per kilogram (kg) during the first half of this year, just slightly over a third of the 180.584 yuan/kg averaged a year ago, according to OPIS data.
Prices of FOB China Mono Perc modules meanwhile averaged $0.108 per watt peak (wp) during the first half of this year, less than half the $0.227/wp a year ago.
Because supply in the market has been far outpacing demand, Longi also expects to set aside a high provision for inventory impairment.
The manufacturers did not say when they expect the market malaise to end.
But TCL and Longi said they would work on releasing new products and using advanced manufacturing methods to gain competitive advantages.
($1 = CNY 7.13)
Reporting by Hanwei Wu, hwu@opisnet.com
Editing by Chuan Ong, cong@opisnet.com
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