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| Author | Kyle Lin |
| Updated | November 29, 2023 |
China exported 16.5 GW of modules in October, showing a 16.7% decrease compared to September's 19.8 GW but a 39.8% year-on-year increase. From January to October 2023, cumulative exports reached 174.1 GW, marking a 30.6% increase compared to the same period last year, surpassing the total shipments of 154.8 GW throughout 2022.
Europe
In October, China exported 6.2 GW of modules to the European market, an 18% decrease from September's 7.6 GW and a 10% decline year-on-year. From January to October, Europe imported 91.6 GW of modules, 22.6% more than the same period last year.
European imports of Chinese modules decreased monthly after a slight rebound in August. Despite the fourth quarter being a traditional low season, the decrease is attributed mainly to inventory issues resulting from significant shipments in the first half of the year that affect shipments in the second half. Overall, Europe’s module demand in the second half of this year will be much lower than in the first half.
By mid-November, European module spot prices came in at EUR 0.11-0.15/W, nearly the same as in October, indicating slowing price declines and gradual alleviation of module inventory issues. Currently, during the construction period before winter holidays, demand hasn't shown drastic decreases. Europe is undergoing technological transitions, and manufacturers re-export modules to address inventory problems. Therefore, in an optimistic scenario, Europe may sustain inventory draws in the fourth quarter. However, with winter holidays approaching in November and December, monthly inventory draws will taper off as usual, leading to a normal decline in export volumes from China.
Asia-Pacific
In October, the Asia-Pacific market imported approximately 5.9 GW of modules from China, a significant decrease from September's 7 GW by 16%. From January to October this year, cumulative imports of modules from China reached 39.3 GW, a 43% year-on-year increase, surpassing the total shipments of 31.5 GW in 2022.
India is the only major market showing inventory draws in the Asia-Pacific in October, importing a substantial 2.2 GW of Chinese modules, which not only surpassed September's 2 GW by 8.6% but also almost on par with the total shipments in the first half of this year. Due to the rapid rise in utility-scale tenders and ground-mounted projects in India, there has been a significant uptick in recent modules demand. Considering the implementation of the ALMM list and the approaching grace period for some projects, it is speculated that Indian developers plan to stockpile Chinese modules at currently lower prices for upcoming projects next year. As a result, inventory draws from India will persist from the fourth quarter of this year into the first quarter of next year. Inventory draws in the fourth quarter may exceed that in the third.
Americas
In October, the Americas imported 2.4 GW of modules from China, a 12% month-on-month decrease from 2.7 GW in September, yet a 10% year-on-year increase. From January to October, cumulative imports of Chinese modules reached 24.4 GW, representing an approximately 13.5% growth compared to the same period last year.
The slight month-on-month decline in October was attributed primarily to Brazil, where the import volume of Chinese modules was 1.8 GW. Although the amount showed a marginal 7.2% decrease compared to September, it was substantial, accounting for 75% of the total import volume of the continent. Despite the new regulation affecting demand from distributed generation projects in Brazil, the decline in module prices continued to stimulate centralized generation projects, leading to a renewed increase in inventory draws in the second half of the year. Recent attention to tariff exemption for imported modules suggests that inventory draws might partly be precautionary moves by manufacturers to mitigate risks.
Middle East and Africa
In October, the Middle East imported approximately 1.5 GW of modules from China, a 20% month-on-month decrease, but a 200% year-on-year increase. From January to October, imports of Chinese modules reached 11.8 GW, a growth of around 68.6% compared to the same period last year, surpassing last year's total shipments of 8.4 GW.
Saudi Arabia remains to wield the most impact in the Middle East market. In October, Chinese exports of modules to Saudi Arabia were about 0.9 GW, accounting for approximately 62% of the Middle East’s market demand, but a 25% decrease from 1.2 GW in September. Saudi Arabia has been steadily driving multiple utility-scale centralized generation project tenders, importing 6.1 GW of modules so far this year, a dramatic fivefold increase compared to the total imports last year, making the country one of the fastest-growing emerging markets this year. Recently, Saudi Arabia's Power Purchase Company (SPPC) initiated a 3.7 GW tender, indicating an optimistic outlook for its long-term PV demand and market development.
In October, the African market imported approximately 449 MW of modules, a 22.9% decrease month-on-month but a significant 159% increase compared to the same period last year. From January to October, accumulated imports from China reached 7 GW, nearly doubling last year's total shipments of 3.4 GW. The decline this month primarily stemmed from Egypt, which imported 120 MW of Chinese modules, surpassing South Africa's 97 MW, making it the largest source of demand in Africa in October.
Still, overviewing the cumulative imports of Chinese modules in Africa from January to October this year, South Africa remains the hugest market, with 3.9 GW of accumulated import volume, at least three times more than the 1.2 GW throughout 2022, indicating that the stimulating policies and reform measures implemented by the South African government in the first half of this year contributed has boosted short-term demand. However, demand decreases every month in the second half, reflecting South Africa’s lack of infrastructure and slow green energy procurement progress.
In the fourth quarter, inventory draws from most countries will slow down amid a cooler-than-expected market enthusiasm, including Europe, which welcomes winter holidays with some remaining inventory. ’Inventory draws in November and December will either stabilize at October’s level or show slight declines. Overall, inventory draws in the second half of this year will be far lower than in the first half.
In the first quarter of 2024, China will see the approaching Lunar New Year holiday affecting module demand, while Europe and the U.S. are in their traditional low season with remaining inventory yet to be fully consumed. Therefore, only India and Japan are expected to sustain inventory draws due to project deadlines. Domestic production capacities in the U.S. and India may begin production in the first half of 2024, making it less possible for the strong inventory draws in in the first quarter of this year to repeat in the same period next year. InfoLink remains cautious and pessimistic towards demand in the first quarter of next year.