Asia’s Downstream Solar Prices Slip from YTD High on Softer Costs, Weak Demand
Asian downstream solar prices have retreated from their year-to-date highs as production costs have eased and demand softened, with FOB China mainstream cell and module prices down 12.9% and 2.5%, respectively, from their late-March peaks, according to OPIS data.
Lower production costs in the second quarter have exerted some downward pressure on downstream solar prices, as key input costs for cell and module manufacturing eased from the previous quarter.
Upstream wafer and polysilicon prices have declined since the start of the year. Some industry sources said upstream prices may have bottomed out, with certain manufacturers beginning to stockpile upstream materials, which could provide some support for downstream cell and module prices.
One downstream producer source told OPIS that some major producers have started stockpiling polysilicon, suggesting they may see the current lull as nearing a bottom.
In upstream markets, EXW China Mono Premium polysilicon and FOB China N-type M10 wafer prices have fallen 36.1% and 22.8%, respectively, on a year-to-date basis, according to OPIS data. Meanwhile, the average Q1 2026 FOB China TOPCon cell price was at $0.0549 per watt peak, around 11% higher than the current spot price.
Silver price remains a key focus for the market, having become an increasingly important cost component in solar cell production. Although silver prices have fallen by over 30% from January’s peak, it remains around 57% higher over the past six months and more than 130% higher on the year.
Given the high silver prices, cell producers are unwilling to stockpile silver paste and are instead holding around one week of inventory to support ongoing cell production, according to a cell manufacturer source.
Several cell producers said they have shifted operating strategies since the start of this year, aligning utilization rates more closely with a built-to-order module amid higher production costs and subdued end-user demand. Sources said this approach allows manufacturers to prevent inventory buildup and better protect margins.
Demand to Shape Price Outlook
Despite signs of upstream stabilization, some industry sources are skeptical of a meaningful price rebound, noting that industry efforts to stabilize prices across the value chain have so far been largely unsuccessful.
One industry source told OPIS that price declines in the upstream polysilicon and wafer markets have been aggressive since the start of this year as market demand remains weak.
China’s removal of solar export tax rebates could also force manufacturers to pass on part of the additional export costs to buyers, potentially lifting minimum FOB price levels while dampening demand from overseas module importers.
Rumors of the export tax rebate cuts had been circulating since last August, prompting some overseas buyers to secure significant volumes from late last year. Furthermore, the front-loading of demand in Q1 2026, prior to the export rebate cancellation on April 1, is expected to weigh on procurement activity for the rest of the year, as buyers may be holding onto elevated inventory levels.
So far, FOB China module prices have held up better than upstream wafer and cell prices in April, but some sources said the relative stability has been driven more by top-tier manufacturers maintaining offer levels than by firm underlying demand.
In China’s domestic market, participants expect installation growth to slow this year following the introduction of market-based electricity pricing policies, while higher cell and module costs have also weakened project economics and weighed on end-user demand.
The China Photovoltaic Industry Association, or CPIA, forecasts China’s 2026 domestic solar installations at 180GW-240GW, indicating a 24%-43% year-on-year decline from the record 315.07GW installed in 2025. CPIA expects installations to recover thereafter, reaching 265GW-300GW in 2028 and 270GW-300GW in 2030.
Middle East Tensions Weigh on Exports
Geopolitical tensions in the Middle East have introduced additional risks to the global solar supply chain. Higher module prices and container shipping costs have created short-term uncertainty for project developers, particularly in markets importing solar products.
While the Strait of Hormuz is not the primary route for Chinese solar exports to the Middle East, it is still used for shipments to certain markets in the region, and any prolonged disruption could have localized supply implications.
In March, some market participants said cargoes originally intended for the Middle East had been redirected to other markets, including Southeast Asia and South Asia, as exporters reassessed delivery risks.
Ember data showed that Chinese module exports to the Middle East in March fell sharply, down around 49% month on month and around 55% year on year.
Some industry sources said more shipping containers are being routed around the Cape of Good Hope in March, reducing reliance on the Suez Canal and Red Sea corridor. While this has helped maintain supply flows, longer voyage times have tied up vessel capacity and pushed up shipping costs in Q1 2026.
According to shipping research company Drewry, the World Container Index for 40-foot containers rose to $2,216, up almost 17% from freight costs in late February before the Middle East conflict escalated.
However, while markets continue to monitor the conflict situation and its impact on fuel costs, recent indications suggest that container shipping rates have come under pressure amid weaker overall demand and excess capacity.
Forward Price Views Remain Mixed
While spot module prices have varied widely in recent weeks, trade sources remain divided on the outlook for forward prices through end-2026.
Some sources believe upstream prices have consolidated and that upstream and component costs may have bottomed out, which could provide some upward support for longer-dated module forward prices.
Others said the sharp increase in downstream module prices in Q1 2026 may prompt some international buyers to reopen price discussions and secure cargoes for the second half of the year.
Over the longer term, Middle East tensions and higher fuel prices may support renewable energy demand in energy-importing markets, both as a long-term energy security solution and a near-term cost stabilization mechanism.
An analyst noted that the Middle East conflict may have contributed to firmer solar demand as countries place greater emphasis on energy security. However, some said any policy-asdriven impact on solar demand will take time to materialize.
“The Middle East tension may prompt some countries to raise their energy transition efforts, but in the short term, the impact on solar may not be significant, as policy guidance and development take time,” an industry source said.
OPIS assessed the FOB China forward curve price for Q4 2026 loading at $0.119/wp as of April 28, down 4% on the month.
—Reporting by Brian Ng, bng@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com