Most leading Chinese PV module suppliers have sold out until the second quarter of 2015, according to the latest report from market research group IHS.
Amidst consolidation of the PV module industry, Chinese tier-1 suppliers increased their market share from 34% in the first quarter of 2014 to 45% in the fourth quarter. IHS forecasts these Chinese suppliers will maintain their combined market share in the first quarter of 2015.
Representing 35% of global module capacity, the total effective capacity of top Chinese suppliers in the first quarter is likely to reach 5.7 GW, with total global demand to climb to 10.8 GW, according to IHS.
We have heard from both suppliers and buyers about the expected shortage of Chinese tier-1 modules in the first quarter, said IHS solar analyst Jessica Jin. "After a demand surge in the fourth quarter of 2014, Chinese tier-1 module suppliers decreased their inventory significantly."
Jin added that since the Chinese New Year take place in the first quarter, companies would not run their capacity in full production and as a result would not have enough products for all quotations. "Most of them have already sold out for the first quarter."
The chart below shows Chinese tier-1 suppliers’ capacity, shipment levels and market share through the first quarter of 2015.
Pointing out that leading Chinese suppliers are well positioned in the global market, IHS said they would benefit from demand surges in Japan, the United Kingdom and South and Central America. Some projects in China have been postponed and are not expected to be completed until the first quarter of 2015, also resulting in substantial demand in the Chinese domestic market.
Early global solar PV preparation for 2015
IHS forecasts total global solar PV installations will reach 52.8 GW in 2015, although most installations will occur in the second half of the year. Leading Chinese suppliers will again build up inventory, beginning in the second quarter, to prepare for the expected demand surge in the second half of the year, the research group predicts. It likewise expects acquisitions among manufacturers and expansion in the module industry to speed up, pointing out that Chinese suppliers’ current capacity cannot meet market demand.
JA Solar has announced a 20% increase in module capacity in China this year, while Trina Solar will add 1 GW of module capacity in 2015. IHS expects more expansions among top Chinese module suppliers.
First-quarter demand surge expected in other regions
Overall global demand is expected to be unusually weak in the first three months of the year but the typical seasonal setback will be mitigated by strong demand in Japan, the U.K. and other countries, IHS says. The first quarter (January through March) is the last quarter of the financial year in Japan, where IHS forecasts a 12% quarterly increase. In the U.K., the Renewable Obligations Certificates (ROC) scheme for ground-mount systems larger than 5 MW will end at the end of March, leading to a rush of installations in Britain. IHS forecasts U.K. installations to reach 1.6 GW in the first quarter. A demand surge is also expected in Central and South America, including Brazil, Chile and Mexico, where a quarterly increase of 80% has been modeled.