The overall capacity growth in the first quarter of 2020 is widely expected to decelerate. Some manufacturers who claimed already 100% production recovery seem not credible since this is the strictest bans order from the government in China’s history in effort to control the spread.
Compared to other China’s players, JinkoSolar should be relatively better positioned against the negative impact thanks to its scalable overseas capacity, diversified material supply sources, and global geographically dispersed and localized team. In addition, JinkoSolar’s leading high level of automation enables its production to recover and pick up earlier than its peers. Even though, the recovery rate will not be 85% until February 20th to JinkoSolar. One thing is confident that China’s government will subsequently step up some policy support, including further interest rate cut and a higher fiscal deficit.
Moreover, the market is also worried that the shortage of material supply and logistic limit due to closed border crossing could deal another blow to the price and delivery time. This is inevitable, but compared to consuming and tourism industries, solar PV is less plunged. So for developers and distributors, in order to minimize unanticipated risks and to be against uncertainty, locking order at earlies time or increasing inventory at current stage is a recommended way to shift pressure to manufactures.
Virus will likely not derail the market directions over the medium term which is determined more by market forces and fundamentals, although it has weighed on some sentiment. The overall recovery will soon come in the next few weeks. The sympathy and mutual understanding from both supply and demand side as well as market supportive measures are urgently needed for the industry.
