Southeast Asia's Factory Closure Wave: Companies Reduce Production in Anticipation of Solar Panel Price Increase?

The two-year exemption from solar tariffs for four Southeast Asian countries granted by the United States ended today. Based on the AD/CVD investigation decision released by the U.S. authorities in May, the route for Chinese photovoltaic companies to export products to the United States from Southeast Asia is once again blocked.

In response, insiders revealed that major local factories have successively announced plans to shut down or reduce production.

According to statistics from Chinese media, the total solar capacity of enterprises that have established production capacity in Southeast Asia is currently about 115.6GW. The capacity of the most affected enterprises is over 35GW, and it is expected that 60GW of capacity will be gradually shut down in the future.

As is well known, in order to avoid related trade barriers and facilitate exports, leading enterprises such as Longi, JA Solar, JinkoSolar, Canadian Solar, and Tongwei have all established factories in Southeast Asia.

Since there is no longer any advantage in using Southeast Asia as a transit point, it is expected that timely withdrawal is also within expectations.

By the end of 2023, installed capacity in Southeast Asia included 59.8GW of solar cell capacity and 90.6GW of solar panel capacity, accounting for 9%-10% of the world's total.

At the same time, more than 80% of the imported photovoltaic components in the United States come from Southeast Asia, with most of them coming from Chinese companies.

For the global market, the gradual closure of 10% of capacity is unlikely to affect overall price trends in the short term. However, in the long run, reducing capacity is beneficial for leading photovoltaic companies to destock. This also corresponds to the industry's previous prediction that "solar panels will rise in price in the second half of the year."

Meanwhile, for the U.S. market, local traders and installers can only temporarily choose expensive solar products produced domestically.

Considering the production reduction plans of various enterprises and the timeline of the anti-dumping and countervailing investigation, for most traders and installers in other regions of the world, June to August may be the last opportunity to stock up this year.

Once the preliminary results of the anti-dumping and countervailing investigation are released, by then the shutdown plans in Southeast Asia will be completed, and solar panels and cells will also increase in price simultaneously. After all, no one wants to continue doing business at a loss.

Currently, the following solar panel products are worth purchasing and have great profit potential:

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