Europe continues to serve as the primary focal point for inverter demand, exerting a pivotal influence on the profitability landscape for inverter manufacturers. From January to July, China's inverter exports totaled 47.8 billion yuan, with a substantial portion of 29.5 billion yuan directed towards the European markets. This constitutes a significant 62% share of China's total inverter export value. Clearly, the demand dynamics within Europe wield a substantial sway over the performance of China's inverter exports. Given that the sale of inverters to the European market tends to yield heightened profitability, the fate of domestic inverter enterprises is intricately tied to the ebbs and flows of European demand.
July witnessed lackluster performance in European demand; however, indications point towards a reversal, with positive export figures projected for August. The export value to Europe in July reached 3.171 billion yuan, marking a 3.22% year-on-year decrease and a substantial 17.89% decline compared to the previous month. Notably, July emerged as the least productive export month in 2023, spanning a 13-month period from July 2022 to July 2023.
Several potential factors contribute to this scenario. Firstly, the persistent inventory issue within Europe has yet to find substantial resolution, necessitating more time for inventory consumption. Insights from the second-quarter performance reports of Enphase, Solaredge, and SMA provide valuable context. Secondly, the European summer vacation period, extending from July to September, might be influencing demand patterns. As the summer season begins in July, the demand typically seen during this month could have shifted earlier to June or potentially postponed to August. This trend is supported by export data from Germany in 2021 and 2022, revealing stronger demand in June and August compared to July. This pattern holds true for the broader European region. Therefore, an anticipated data recovery is expected for August.
Thirdly, the energy crisis resulting from the Russian-Ukrainian conflict in 2022 prompted a surge in European inverter demand in the latter part of that year. For example, the third quarter of 2022 witnessed inverter demand reaching 10.9 billion yuan, a remarkable 195% increase compared to demand in the first quarter of the same year. This sharply contrasts with 2021, where third-quarter demand was only 51% higher than the first quarter. However, the impact of the energy crisis in 2023 has diminished. The continued high import volume into Europe underscores the enduring nature of European demand rather than indicating a sharp decline.
The final influencing factor is pricing dynamics. Projections indicate that the full-year export volume of European inverters in 2023 will reach 50.5 billion yuan, representing a robust 48% year-on-year increase. Assuming that the export volume to Europe remains consistent with the same period in 2022 from August to December, this implies a steady year-on-year growth rate over the next five months. Consequently, it is anticipated that the total European export value for 2023 will reach around 50.5 billion yuan (29.47 billion yuan from January to July and an estimated 21.07 billion yuan from August to December). In comparison, the export value in 2022 was 34.2 billion yuan, highlighting a substantial year-on-year increase of 48% for 2023.
