Chinese module exports decline 4% MoM amid dropping inventory draw except the Americas

China exported 18.76 GW of modules in July, down 4% MoM from 19.62 GW but up 9% YoY from 17.29 GW, according to InfoLink’s customs data. China has exported 170.24 GW of modules from January to August, up 23% YoY from 137.87 GW.

As of August, the top five largest markets importing Chinese modules are, by order, the Netherlands, Brazil, Saudi Arabia, India, and Pakistan, with monthly imports accounting for 46% of the global total. Except for a slight growth in the Americas, Europe, Asia Pacific, the Middle East, and Africa saw declines at different degrees, among which Asia Pacific and Africa saw the deepest dip.


 

European market

Europe imported 8.21 GW of modules from China in August, down 4% MoM from 8.52 GW and nearly on par with last August’s 8.16 GW. Europe has imported 70.9 GW of modules from January to August, down 10% YoY from 77.69 GW.

European PV installations slowed down during the summer vacation in July and August. Meanwhile, oversupply of electricity during the summer, a supply-demand imbalance, and lagging infrastructure also impact the short-term profits for power producers. Recently, reduced subsidies and the sluggish economy among major European countries (especially in key markets such as Germany and Spain, where economic stagnates and ground-mounted projects postponed) have affected overall European demand. As a result, European demand may fall in the third quarter and is unlikely to recover this year. With the traditional fourth-quarter off-season coinciding with the winter holidays, demand growth in the European market will likely be limited, even seeing negative growth.

Spot prices for TOPCon modules in FOB terms in Europe stood at USD 0.10-0.11/W in August, a slip compared to July. Some modules were delivered at USD 0.09-0.12/W in September, averaging USD 0.105-0.11/W. Given the shrinking demand in the fourth quarter, the traditional low season, module prices may further decline as manufacturers seek orders.


 

Asia Pacific

The Asia Pacific imported 4.63 GW of modules from China in August, down 10% MoM from 5.16 GW but up 5% YoY from 4.42 GW. The market has imported 50.27 GW of modules from January to August, up 90% YoY from 26.42 GW.

India imported Chinese modules the most in the Asia Pacific, importing 1.17 GW of modules in August, down 17% MoM from 1.41 GW. India has imported 13.01 GW of Chinese modules from January to August.

Indian market remained unchanged in August. Due to port congestion and tight shipping capacity, Chinese shipments to Indian ports experienced delays, leading to extended delivery cycles. Moreover, module imports sharply declined after India re-implemented the ALMM in April. Some local developers believe India may ease the ALMM, allowing for a continued import volume between April and August. However, no official exemption rules have been released so far. As domestic module production capacity in India ramps up, demand for non-India modules may see further declines.

Pakistan, the second-largest Asian Pacific market, imported 1.07 GW of Chinese modules, up 5% MoM from 1.02 GW, accumulating 14.31 GW from January to August.

Pakistan's module imports in August were almost flat compared to July. Recently, the local government stated that imported modules would not be taxed, and electricity price hikes drove demand for distributed generation projects. Some provinces have introduced policy incentives for distributed generation projects, boosting Pakistan's PV demand. However, as Pakistan's imports from January to August exceeded last year's total by 90%, the import momentum will likely slow down in the fourth quarter following the high import volumes in the first three quarters.

Indian and Pakistan import volumes in August accounted for 48% of the total in the Asia Pacific. Meanwhile, Japan, Thailand, Malaysia, and Cambodia saw rising import volumes, while Australia, the Philippines, and South Korea experienced shrinking imports.


 

The Americas

The Americas imported 2.55 GW of modules from China in August, up 9% MoM from 2.35 GW in July and down 5% from 2.68 GW last August. The region imported 21.65 GW during the January-August period, up 12% compared to 19.3 GW of the same period last year.

Among countries in the region, Brazil accounts for the largest share in terms of Chinese module imports in August, where 1.53 GW of modules were imported. Compared to July’s imports of 1.44 GW, it was an increase of 6%, accounting for 60% of the total imports to the region. Brazil has imported 15.06 GW of Chinese modules during the January-August period.

Brazil’s new round of import quota has renewed, which will implement from July 2024 to June 2025, with quota reducing to USD 1.01 billion. Brazil imported modules in July and August worth USD 353 million, accounting for 35% of the duty-free quota. However, the impact of tariff restrictions on Brazil's imports is limited. As the local production capacity has yet to ramp up, Brazil will continue to rely on module imports from China.

The Brazilian government has introduced policies to boost distributed generation installations and support the development of agrivoltaics, underpinning demand in the second half. In mid-August, the Brazilian government proposed a bill to the Chamber of Deputies to reform the electricity industry. The goal is to boost residential demand for PV systems by offering electricity subsidies and fully opening up the energy market. However, subsidies might discourage people from installing PV systems, so the real impact is uncertain.

The Middle East and Africa

The Middle East imported 2.49 GW of modules from China in August, similar to  2.51 GW in July and up 61% compared to last August’s 1.55 GW. The region has imported 20.46 GW of modules during the January-August period, increasing by 142% compared to 8.47 GW in the same period last year.

Among countries in the region, Saudi Arabia accounts for the largest share, having imported 1.3 GW of Chinese modules in August, down 12% from July’s 1.47 GW, accounting for 52% of the region’s total imports. The country has imported 11.45 GW of modules from China during the January-August period.

The government of Saudi Arabia signed several partnership agreements with multiple developers and issued auctions for many ground-mounted projects. The government is set to auction 20 GW of renewable projects this year, highlighting the development of PV and underpinning module demand in the future.


 

Africa imported 0.87 GW of modules from China in August, down 19% from July’s 1.08 GW, up 81% compared to last August’s 0.48 GW. The region has imported 6.96 GW of modules during the January-August period, up 16% compared to 5.99 GW in the same period last year.

Among African countries, South Africa accounts for the largest share, having imported 365 MW of modules in August, down 32% from 538 MW in the previous month, accounting for 42% of the region’s total imports. South Africa has imported 2.46 GW of modules during the January-August period.

The 10% tariff imposed by the South African government on module imports led to an import decline in July, and factoring in the shipping time, the reduced shipments in July were reflected in August’s import volumes. The tariff may have a short-term impact on local developers’ imports.


 

By the end of the third quarter and into the fourth, imports to major countries will remain flat, with a chance of slight growth. The European market shows weaker demand, limiting shipment growth. The Asia-Pacific market’s growth will depend on significant changes, especially if India eases the ALMM lists. In the Americas, Brazil’s potential policy changes could also impact demand.

Global shipments in the third quarter may stay the same as last year. For the full year, significant growth is unlikely, but shipments should match or slightly exceed last year's levels.