"Extremely strong demand in China in 4Q13 (possibly more than 6 GW) due to pull-in before the Jan. 2014 subsidy cut and the seasonally weak 1Q14 have led panel and polysilicon prices to decline slightly since February. We believe demand within China in Q1 could have been less than 1 GW, and while Q2 is likely to be slightly higher, most of the improvement won't occur until 2H. We believe that 2Q14 pricing may be trough for the year and 2H14 demand is likely to be robust, driving moderate price increases for panels and polysilicon given our supply/ demand analysis. That said, the rebound in demand is contingent on policy changes to address the quotas on utility-scale development and FIT disbursement or reforming the incentives for distributed generation (companies agree the 8 GW target is not achievable under the current policy)."
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