Entering the fourth quarter, China’s module exports started to drop from the second half of the year after experiencing robust growth in the first half amid rapidly expanding demand worldwide. After peaking in July, exports have contracted for the third month in a row in October. InfoLink’s China customs database shows that China exported 11.8 GW of solar modules in October, up 40% YoY, but that increase is minor compared with the growth witnessed in the first half. The month-over-month growth was negative, sitting at -7%, a smaller decline compared with -11% in September, but clearly, overseas inventory draw has been weakening. Exports amounted to 133.3 GW from January to October, up 83% YoY, possibility leading to inventory pileup in overseas markets. Consequently, demand in the second half dropped.
In September, most markets saw decreased module imports from China, but that became inconsistent in October. Exports to the Asia Pacific, the Americas, and Africa saw little growth, while exports to Europe and the Middle East declined. Europe, the largest overseas market, saw the highest degree of decline, affecting the overall export volumes.
Europe imported 6.9 GW of modules from China in October, decreasing 10% YoY and 11% from the previous month. Compared with the same period last year, that import volume posted 68% of YoY increase, but the YoY growth rate is significantly lower than that in the first half. From January to October, the region has imported 74.7 GW of Chinese modules, accounting for 56% of China’s total module exports.
Europe’s increased demand is a result of Russia-Ukraine war-induced polices, renewables target, and skyrocketing energy prices. These drove Europe to import large volume of modules from China in the first half, hitting 140% of YoY. However, inventory draw has slowed significantly since the third quarter, falling for the third consecutive months since July. Rationale behind include inverter and labor shortage, as well as stocked inventory, which is the major cause. As a result, the Netherlands, Spain, and Germany witnessed falling imports. Moreover, the fourth quarter is the traditionally low season in Europe. Therefore, exports to Europe will continue to decline in this quarter.
The Asia Pacific region imported 1.9 GW of modules from China in October, a %3 MoM growth but 3% YoY decrease. The cumulative import volume from January to October stood at 24.9 GW, up 36% YoY. Except India’s BCD-induced impact on stockpiling rush during January and March, imports to this region have remained stable since April.
This year, India, Japan and Australia are expected to contribute 76% of Asia’s market share. Although India is one major importer, its import volume has been sluggish after imposing 40% BCD on modules, with less than 100 MW of monthly import. Japan’s import volume slightly grew in October and stays stable throughout this year. Australia’s import volume slipped by nearly 37%; it was the fourth dip in a row since June. Except this month, import volume stay pretty much unchanged. The two countries all imported more modules than last year.
In Southeast Asia, countries including Thailand, the Philippines, and Malaysia also saw higher import volume than the preceding year. Most countries, except Thailand, all imported more modules than the previous month.
The Americas imported 2.2 GW of modules from China, up 28% YoY and 2% MoM. There was not much change. During the January to October period, the region imported 21.5 GW of modules, a significant growth of 79% compared with 12 GW over the same period last year.
The major importer in this region in Brazil, which has imported 15.7 GW of modules since January, accounting for 73% of the region’s total. Globally, Brazil is the second largest importer of Chinese modules this year. Under Law 14.300 introduced earlier this year, the country will start to charge grid fees on small-scale distributed generation projects, and thus an installation rush occurred this year. The country’s import volume slightly declined after peaking in August, but still stayed at around 1.5 GW in September and October.
Among countries in this region, Brazil and Dominican Republic imported more modules than the previous month, whereas Mexico and Colombia saw imports declining. Yet, the overall import volume this year is markedly higher than the last, especially Dominican Republic and Colombia saw import volume growing by several times.
Middle East and Africa
The Middle East imported 0.5 GW of modules from China in October, decreasing 33% from the previous month but increasing 23% YoY. The proportional change is large, but the base is small; the actual monthly decline is less than 300 MW. As of October, the region has imported 9.6 GW of Chinese modules, up 75% YoY. United Arab Emirates, the largest market in the region, saw import volume staying unchanged from the preceding month, while other countries experienced negative growth in the month. Africa imported 0.29 GW of modules from China, up 36% YoY. Compared with September, the country’s import volume increased only 9%.
China’s customs data of modules suggest that overseas demand continues to weaken. Europe, having stockpiled in the first half, has lowered its imports significantly. The market’s falling prices also indicate that manufacturers are selling inventory. In other regions, inventory draw also slowed after showing a downward trend in the preceding month. Given Europe’s stocked inventory, difficulty in construction during winter in Northern Hemisphere, and labor shortage, as well as traditional low season, InfoLink expects inventory draw from overseas markets to remain sluggish until the end of the year.