According to EnergyTrend, a research department of TrendForce, as both Germany and Britain have recently announced new government subsidies for 2012 (with significantly adjusted figures), the European market has seen signs of recovery. However, EnergyTrend indicates that global solar energy industry inventory levels are still around 6GW-8GW; while demand from Europe may recover somewhat, this new development will not have a significant impact on the industry as a whole. Manufacturers are still facing oversupply, and the current increase of installations will not provide any substantial benefit to mid and upstream makers.
Solar manufacturers have all indicated that they are gearing up for winter; Motech CEO Tso Yuan-huai believes that the situation will be bleak through 1H12. EnergyTrend observes that most manufacturers are exceedingly conservative towards 2012, with pessimistic makers even predicting that things will not improve until 1H13. From the perspective of supply and demand, currently global capacity is approximately 50GW, but forecasted demand for 2012 is around 20GW. Thus, EnergyTrend believes that in order to restore the industry’s supply and demand balance, significant capacity adjustments – and perhaps even the withdrawl of major manufacturers – will be necessary.
Regarding the spot market, inventory dumping is still prevalent, an indication of continuously weak demand. According to EnergyTrend, the majority of dumped goods on the spot market come from Europe and the U.S., with a portion from Chinese and Korean manufacturers. As spot price continues to fall and there are few concluded deals, traders indicate that buyers are not in a hurry to purchase and experimentally low prices continue to appear on the market. Related manufacturers indicate that while price has not yet hit rock-bottom, it is expected to reach a low in 1Q12.
