Module exports hit record high as overseas inventory draws strengthen in March

China exported as much as 21.2 GW of modules in March, a 43.1% month-on-month increase from February's 14.8 GW, and a 56.5% year-on-year increase compared with March 2022. After experiencing strong exports in the first two months of 2023, China's module exports reached another peak in March. The monthly export volume of 21.2 GW outperformed that of the high season last year, demonstrating the high demand from overseas markets in 2023. China exported a total of 50.9 GW of modules in 2023. Global demand is likely to increase more than expected this year.

Europe

In March, Europe imported 12.5 GW of modules from China, a 49% month-on-month increase from February's 8.4 GW and a 76% year-on-year increase compared with March last year. In 2023, the bloc imported 29.5 GW of modules from China, 77% more than in the same period last year.

As a result of the energy crisis caused by Russia's war in Ukraine last year, PV demand in the European market increased significantly and gave rise to the growth of the global PV market. The demand picked up rapidly early this year, despite a weakened inventory draw in the fourth quarter last year. Being the typical low season of a year in Europe, January to March saw a greater inventory draw than the high season in 2022.

The strong inventory draw in Europe since January raised many questions in the industry. Investigation of InfoLink found Europe adding merely 40-45 GW of installed PV capacity, while importing 86.6 GW of modules from China in 2022, pointing to a certain amount of local inventory. However, increasing import volumes since January indicate an improvement in Europe's inventory usage. Another contributing factor behind the rise of import volumes is Chinese manufacturers' strategic stock-up in Europe before the high season. In addition to the Netherlands, the transshipment hub in Europe, and Germany, where demand growth has always been sturdy, recently thriving markets, such as Spain and Poland, will boost the growth of PV demand in Europe in 2023.

Asia Pacific

The Asia-Pacific market imported 3.9 GW of modules from China in March, a 26% month-on-month increase and a 3% year-on-year increase. In 2023, the region imported 9.5 GW of modules from China, a 24% year-on-year decrease.

The large demand in the Asia-Pacific market in the first quarter last year mainly came from the inventory draw in the Indian market before the imposition in April 2022. After the BCD took effect, India’s demand for Chinese modules shrank rapidly, and the average quarterly import was less than 100 MW in 2022. Still, the market show signs of recovery this year, importing around 550 MW of modules in March and a total of more than 1.5 GW in 2023. This shows that despite the challenging trading environment for imports, inventory draws in India have regained momentum due to huge underlying demand and upcoming deadlines of previously delayed projects. 

Besides India, other major markets in the Asia Pacific, such as Japan and Australia, all maintained stability in their import level. Pakistan experienced the most significant growth in the first quarter of 2023. Driven by high electricity prices and an unstable power supply, the country started to develop solar energy rapidly and imported over 900 MW of modules from China, making it the largest source of demand in the Asia-Pacific market this month.

Americas

The Americas imported 3.1 GW of modules from China in March, a 61% month-on-month increase and a 144% year-on-year increase. The region has imported 7.6 GW of modules from China so far in 2023.

Brazil remains the main importing country in the Americas, importing 2 GW of modules from China in March, accounting for 64% of the total import volume of the region. It was also the largest market for Chinese modules this month, second only to the Netherlands, the transshipment hub in Europe. Brazil has imported over 5 GW of modules from China in 2023. The mass interconnection applications before Law 14.300, a new regulatory framework unfavorable to distributed generation projects that took effect in January 2023, are expected to propel the module demand in Brazil in the short term. Other major markets within the region included Columbia, Chile, etc. While their total demand was smaller than that of Brazil, their market size had increased significantly compared with last year.

Middle East and Africa

The Middle East imported around 1 GW of modules from China in March, an 18% month-on-month increase and a 59% year-on-year increase. The major contributing countries were Saudi Arabia and the UAE, which collectively imported 1.5 GW of Chinese modules in 2023, accounting for 60% of the region's total import volume. The main source of demand is large-scale ground-mounted projects. For now, there are a considerable number of large-scale ground-mounted projects under construction,  driving the demand in the Middle East market.

Africa imported 731 MW of modules from China in March. South Africa dominated the relatively small African market with an import volume of 467 MW in March. The country had long been relying on power rationing as a solution for its inadequate energy generation, but now the government intends to solve the problem through renewable energy. Since 2023, South Africa had implemented subsidies for distributed generation projects to promote PV development. As a result, the country imported over 1 GW of modules so far this year, establishing itself as a key player in PV development within the African market.

Overall, China's module exports surpassed expectations in January and February, and reached a new peak in March, driving the total export volume in the first quarter to over 50 GW. Although the rapid growth of overseas demand is excellent news for the industry, there are many hidden worries. In addition to the actual depletion of imports, the industry looks closely at whether the large inventory draws in the first quarter will negatively affect future demand in 2023. Usually, the European market will enter its high season in the second and third quarters, becoming the largest overseas market. However, having imported nearly 30 GW within the first quarter, it will be difficult to recreate the substantial growth of previous years in the second quarter this year.