In the middle of December last year, Longi Green Energy Technology Co.Ltd(601012) in the photovoltaic sector lowered the price of products across the board twice in the same month. At that time, the price given by the company was M10 size from 6.20 yuan to 5.85 yuan, M6 (166mm) from 5.32 yuan to 5.03 yuan, and G1 (158.75mm) from 5.12 yuan to 4.83 yuan. However, the price reduction trend of silicon wafers did not last long. According to the latest product price of Longi Green Energy Technology Co.Ltd(601012) on March 25, the company raised the price of silicon wafers again. The price of M10 (182mm) silicon wafers was 6.70 yuan / piece, M6 (166mm) silicon wafers was 5.55 yuan / piece, and the price of G1 (158.75mm) silicon wafers was 5.35 yuan / piece.
Data source: company announcement
It can be seen that the price reduction of silicon wafers did not last long, and the overall upward trend was still maintained, and the price reduction tide also prompted the rush to install PV at the end of 2021. At the beginning of 2021, the market organization expected the new installed capacity of photovoltaic in China to be 55gw-65gw (median 60GW). In the first ten months of 2021, China's newly added PV installed capacity was only 29.31gw, in other words, nearly 50% of the installed capacity will be completed in the next two months. According to the data at the beginning of 2022, China's newly added PV grid connected installed capacity in 2021 was about 53gw, which was lower than the 60GW expectation given by the agency, but it is undeniable that China's newly added PV installed capacity exceeded 18gw in December last year alone, About half of the total new installed capacity in the first 11 months.
The installation tide has undoubtedly boosted the market price of silicon wafers again.
Although we are optimistic about the development trend of the photovoltaic sector for a long time, in the short term, the impact of the epidemic and geographical conflict are "X" factors that can not be ignoredP align = "center" 01 p align = "center" geopolitical conflicts will hinder the development of new energy in the short term
Economic globalization has been recognized by the world since the 1990s. Its significance is conducive to the rational allocation of resources and production factors in the world and the global flow of capital, products and science and technology. However, after the epidemic in 2020, there was a trend against economic globalization.
First, trade is an important hub of economic globalization. Under the influence of the epidemic, "geographical isolation" has led to an unprecedented impact on the supply chain. The obstruction of trade has gradually transmitted to the imbalance between supply and demand of global resources and commodities, which has triggered global inflation expectations. The differentiation point is that major economies and countries have different treatment methods for the epidemic, which are eroding the "dam" of economic globalization like waves.
In the face of inflation and economic recession, central banks are in a dilemma.
From the fact that the yield of 30-year US Treasury bonds is lower than that of 5-year US Treasury bonds, we can see that the global economy is experiencing a recession. In the face of a recession, relatively loose fiscal and monetary policies are generally required. Some data show that the scale of US fiscal stimulus in 2020 accounted for more than 70% of the normal years before the epidemic (only about 10% in 2009), and the interest rate was reduced to 0-25bps and remained low, At the same time, we will continue to expand the meter and release water to boost China's economy.
But in fact, it also accelerates the cycle of global inflation expectations turning to global inflation. The "isolation" caused by the epidemic makes this "water release" an unprecedented boost to inflation. The high price of upstream resources and the ultra-high sea freight are the signs: the sharp growth of transportation costs, the release of downstream demand and the significant limitation of the elasticity of commodity supply side have enlarged the gap between supply and demand, resulting in the sharp rise of commodity prices. This is also the main reason why the spot price of global commodities rose in 2021 and the performance of the upstream cycle sector of A-Shares doubled. However, only the manufacturing enterprises in the middle and lower reaches can understand what is "unbearable".
When there was only an epidemic, the global economy may only be in a "fragmented" state. However, the conflict between Russia and Ukraine seems to be putting an end to "economic globalization". The "unconventional" sanctions imposed by Europe and the United States on Russia are evidence. For example, the Russian market is completely isolated by the European and American capital markets, the United States freezes Russia's US dollar foreign exchange reserves, and Europe freezes Russia's overseas assets. However, Russia is not a "soft persimmon". In the face of joint sanctions from Europe and the United States, Russia has also implemented anti sanctions: stop exporting natural gas and oil to Europe and the United States, repay foreign debt in rubles, etc. All these seem to indicate the end of "economic globalization".
Although the conflict between Russia and Ukraine itself is only a "local geopolitical conflict", the "sequelae" after the conflict will undoubtedly have an inestimable impact on the economic situation of the whole world. Economic confrontation has led to a sharp rise in global oil, natural gas and other energy prices. At the end of March, the United States even considered releasing 180 million barrels of oil from strategic oil reserves, the largest in nearly 50 years. It is not difficult to see that the short-term anti sanctions of Russia to stop energy exports have affected the energy security of Europe and the United States.
How to choose between short-term national economic production and life and long-term global "carbon neutrality"P align = "center" 02 p align = "center" internal and external troubles of photovoltaic industry
Although it is good for the long-term transformation of global energy to new energy such as photovoltaic. But in fact, "far hydrolysis can't quench near thirst". In the short term, this recession will inevitably hinder the process of global transformation to new energy. For most countries, fossil energy is still the main force, and its price is directly linked to the economic production and life of various countries. It is not difficult to speculate that the first task of all countries next is to ensure energy security, increase investment, exploitation and reserves of oil and natural gas, maintain and increase the supply of oil and natural gas, so as to stabilize prices.
Therefore, the short-term growth rate of installed capacity of photovoltaic industry will still be lower than expected.
According to the data of the national energy administration, in the first two months of 2022, China's newly added photovoltaic installed capacity was 10.86gw, a significant increase of 234% year-on-year, reaching 83.4% of the total newly installed capacity in the first half of last year, exceeding market expectations. In fact, the first quarter of 2021 also exceeded expectations, but the peak installation season in the second and third quarters was less than expected. Had it not been for the price reduction of silicon wafers at the end of that year, the "rush for loading" in December was driven by the decline in costs, which barely touched the lowest expectation for 2021.
Estimation of China's photovoltaic installed demand during the 14th Five Year Plan period (unit: GW) data source: CPIA
It should be noted that the next step for the photovoltaic industry is no easier than 2021:
"Foreign invasion": first of all, the repair of economic globalization takes time, which is an uncertain length of time. However, from the perspective of the United States considering the use of strategic oil reserves, it seems to be well prepared for "hard and hard". Whether other countries will increase the development of oil and natural gas in order to ensure their own energy supply; Secondly, China's energy structure is dominated by fossil energy, supplemented by water conservancy and power generation. Compared with the development of optoelectronics, water conservancy and power generation is regarded as a "near water tower". It is not difficult to understand why the State Council executive meeting at the end of March asked to speed up the infrastructure construction of China's water conservancy. It is expected to invest 800 billion in water conservancy. It is speculated that the construction of new energy in 2022 may be biased towards water conservancy.
Data source of China's power generation structure in 2021: National Bureau of Statistics
"Internal problems": first, the uncertain factors of the resurgence of the epidemic. Under the influence of the epidemic, some enterprises have stopped production and shutdown. Will it affect the photovoltaic industry in the future; Secondly, the price of silicon material in the upstream of the photovoltaic industry has risen continuously for 11 years. It can be seen that the downstream demand is large, and there is a mismatch between upstream and downstream supply and demand. Next, if the price of raw materials continues to rise, if the cost pressure is transmitted to the middle and downstream after the end of the last round of orders, it will affect the operating rate of the middle and downstream; Finally, with the declining tide of government subsidies for photovoltaic power generation, the dividend period of photovoltaic "savage growth" will also pass, and the project yield and installed capacity growth rate will enter a mature period.
Compared with the "difficulty" in 2021, 2022 may be "better than it is" driven by geographical conflicts. After March 2022, it has entered the cycle of global economic recession. The superposition of inflation will inevitably make the global central banks take a very cautious attitude towards monetary and fiscal policies. Although the long-term goal of developing the photovoltaic industry will not be affected, the short-term photovoltaic sector is bound to be affected by the global energy security and economic recession cycle.
