Rebate Rollback Spurs Solar Demand Whiplash, Longi Warns

• China axing solar export-tax rebates April 1 could spark a pre-holiday rush then slump, squeezing margins amid pricey silver, as Longi trims silver use and tests storage for Europe/U.S.

China plans to scrap a key export-tax rebate for solar products on April 1, a move aimed at industry consolidation that could trigger a pre-deadline order surge and a sharp post-cutoff slump, Longi Vice President Zhang Haimeng warned. Manufacturers may push overtime through the Lunar New Year to ship ahead.

The sector, already mired in oversupply and two years of losses, faces tighter margins as record silver prices bite. Longi and peers are cutting silver usage, though the technology isn’t fully commercialized, with cost-performance clarity due in months. Longi is also testing energy-storage offerings, prioritizing Europe and eyeing the U.S.

Will China’s rebate cut trigger Q1 export surge and Q2 global supply whiplash?

• Yes—expect a front‑loaded export spike in late Q1 as buyers rush to beat the April 1 rebate cut, followed by a Q2 air pocket as channels digest inventory.
  
• Magnitude: March shipments from China could lift 15–30% month-on-month, skewed to Europe, Brazil, MENA, and ASEAN where price sensitivity is highest.
  
• Logistics: Port congestion and container imbalances likely in March; spot freight and insurance premiums could blip up, with April sailings underbooked.
  
• Pricing: Pre-deadline offers may compress module ASPs another 2–5% to clear slots; Q2 could see a brief price rebound if inventories tighten locally, then normalize as new quarter production ramps.
  
• Supply chain: Overtime runs will lift March utilization at wafer/cell/module lines; April–May curtailments and maintenance windows likely as margins reset.
  
• Technology mix: Shippers will prioritize mature TOPCon lines for volume; HJT output may lag unless secured by fixed-price offtakes due to silver intensity.

Destination markets:

• Europe: High share of utility-scale buyers will overstock; Q2 tenders may slip schedules to digest inventory, pressuring local distributors.
• U.S.: Limited direct impact due to tariff walls; watch rerouting via Southeast Asia and any tightening from ongoing trade cases.
  
• Brazil/MENA: Aggressive pre-buying likely; April–May project starts could pause until Q3.
  
• Inventory cycle: Expect 6–10 weeks of channel inventory in some hubs by early April; distributors may discount older lots to move stock.
  
• Downstream projects: EPCs with fixed PPA CODs gain; merchant and C&I projects may “wait-and-see” in April for post‑surge pricing signals.
  
• Polysilicon and upstream: Minimal immediate effect on poly; wafer prices may wobble as lines throttle post‑March. Watch for short‑lived cell bottlenecks in Q2 if restarts lag.
  
• Finance/FX: Any RMB softness can cushion exporters post‑rebate; tighter working-capital needs could stress smaller manufacturers and accelerate consolidation.
  
• Policy overlay: EU subsidy and trade scrutiny could intensify if March surge is conspicuous; any new measures would amplify Q2 volatility.
  
• Storage tie‑in: Paired PV+storage orders may be deferred to align with Q2 module drawdowns; battery lead times help smooth the whiplash.
• Indicators to watch: China customs data (March/April split), European warehouse inventories, freight rates, cell utilization indices, and tender rescheduling.
• Bottom line: A Q1 sprint is likely; Q2 whiplash risk is high but transient—expect stabilization into late Q2/early Q3 as inventories clear and new pricing baselines set.