Trina, Longi Report Strong Sales in Apr-June Quarter On Buoyant US, China Demand

Tier 1 module manufacturers from China, Longi Solar and Trina Solar,  seem to have shrugged off the impact of the Covid pandemic very well, with very strong results for the April to June quarter , and Hi, in case of Longi.  The firms have reaped the full benefits of their strong domestic as well as global presence, with growth underpinned by especially strong international sales.

While Trina solar reported a 37 percent increase over the same period last year, with 5.8 GW of total reported sales, Longi Solar didnot disclose module shipments for the quarter, but revenues in Q2 of RMB 11.54 billion (US$1.68 billion). The operating income was 42.73% higher than in the corresponding period last year.

While Longi reported a share of 38 percent for global markets outside China, Trina Solar didnot give a breakup for Asia and China, simply pointing to a 238 percent increase to over 1 GW in North America, and a 60 percent increase in shipments to Europe, at 1.7 GW.

While the rebound in Chinese demand has been well documented, part of the strong show in the US can be credited to extension of the safe harbor deadline for renewable energy projects that began construction in 2016 or 2017. Under the old rule, those  solar and wind  projects would have needed to become operational by the end of 2020 in order to claim the full 30 percent Investment Tax Credit (ITC) for solar projects or the full 2.5 cents per kWh Production Tax Credit (PTC) for wind projects. The May announcement gave them one more year, until the end of 2021, to begin generating power.

An earlier rush to order in bulk for fear of tariffs had also led to an order rush late last year. Add to that the well diversified manufacturing bases across Asia for these firms, and they are well placed to   ‘manage’ US punitive tariffs.

The delay in additional basic customs duty(BCD) announcement in India,  which was widely expected in August, has probably not helped them much, thanks to the overall slump in the market. Other key Asian markets have not really fired up yet, with India and Japan still the biggest hopes for volume and value, respectively for mot Chinese sellers.