Chinese customs data show China exported 19 GW of modules in May, up 5% from 18 GW in April and up 32% from the same month last year. Exports from January to May reached 88 GW, a 39% year-on-year increase, indicating rapid growth in overseas markets in 2023.
Europe imported 11.9 GW of modules from China in May, up 12% from 10.6 GW in April and 34% from the same month last year. Imports from China from January to May reached 51.9 GW, a 56% year-on-year increase.
Although exports to Europe increased from the previous month, the annual growth rate showed signs of slowing down in April and May compared to the first quarter, reflecting the impact of massive inventory draws earlier this year. Inventory draws in the second quarter increased much slower than in the previous quarter. At that, electricity prices began to fall, affecting PV demand adversely. On the distribution market, module prices started to drop in the second quarter, currently sitting at USD 0.20-0.22/W. Price quotes for the second half of this year reach USD 0.17-0.18/W, reflecting price declines across the supply chain and weakening demand in Europe. Therefore, although the third quarter is usually the peak season in Europe, the year-on-year increase will not be as fast as that of the first quarter, dragging down annual demand in Europe.
The Asia-Pacific market imported 2.5 GW of modules from China in May, down 19% from the previous month and up 17% year-on-year, bringing the cumulative imports in 2023 to 15.2 GW.
India’s demand has contracted rapidly since the implementation of the BCD in April 2022. Yet judging from customs data, module prices have fallen this year to the level where local developers can start their deferred projects. India’s monthly demand for Chinese modules in the second half of 2022 averaged only around 100 MW. There has been significant growth since 2023, with a cumulative import of 2 GW as of May, averaging 400 MW per month, indicating that demand has started to pick up as the price falls.
Japan and Australia, both mature PV markets, have seen a slight increase in module imports from China this year compared to 2022, with minor monthly fluctuations. Other Southeast Asian countries and Pakistan have seen month-on-month declines, despite a more significant growth this year.
The Americas imported about 2.37 GW of modules from China in May, which is little changed from the previous month and up 18% year-on-year. The total volume of imports in 2023 has reached 12.4 GW, up 26% year-on-year.
Brazil, a major market in the region, imported 1.3 GW of Chinese modules in May, down 12.5% from April. Before this month, projects smaller than 75 kW had been connected to the grid to apply the more favorable old electricity framework. In May, demand slowed down significantly compared to the beginning of the year, indicating that the massive inventory draws due to regulatory changes have been subsiding and begun to affect monthly demand. For projects of other sizes, the installation deadline is the end of 2023. As module prices drop, Brazil's ground-mounted market shows significant growth. The country is expected to sustain demand until the end of the year. Meantime, the Chilian market has grown significantly since 2023, importing 487 MW of modules from China in May, a 9% month-on-month decrease. Chile has imported 2 GW of Chinese modules so far this year and is rapidly growing as a key PV market in South America.
Middle East and Africa
The Middle East imported 1,020 MW of modules from China, a slight month-on-month and year-on-year increase. Saudi Arabia boasts remarkable demand this year, importing 536 MW in May and 1.8 GW so far this year. This figure represents 40% of the region's annual demand, making it the leading market in the Middle East, followed by the UAE and Israel. Demand in Saudi Arabia comes primarily from large-scale ground-mounted projects, the ambitious goal of the Public Investment Fund, and high levels of policy enforcement. The country is seeking manufacturers actively to construct local manufacturing capacity. Moreover, falling module prices are boosting the development of ground-mounted projects, which is expected to generate significant module demand in the future.
The African market imported 1,173 MW of Chinese modules in May, with South Africa being the main source of demand. South Africa has long suffered from severe power constraints, causing significant economic losses due to intermittent power outages. In response, the government has turned to renewable energy as a solution, offering tax exemptions for distributed generation projects to encourage installation. South Africa's PV demand has been surging this year, with more than 2.6 GW of modules imported during January and May, nearly 4.5 times more than the same period last year.
Europe still sustained significant growth in May, which, however, slowed down from the first quarter of this year, indicating the impact of large inventory draws on demand in the second quarter. Since Europe is the largest overseas market, a slowdown in its inventory draws will affect manufacturers' shipment plans this year. While Europe and Brazil, the fast growers last year, gradually losing momentum, some emerging markets that used to have lower demand are experiencing higher-than-expected growth thanks to high electricity prices and module price declines. The second and third quarters are the typical high season in non-China markets. This year, due to inventory piled up in the first quarter, demand in the third quarter will continue slowing down as in the second, constraining the growth in non-China demand throughout the year.