Upstream sector saw record low prices as mono-Si wafer prices drop abruptly
May 13, 2020 PV InfoLink
It’s expected that polysilicon producers will be partially or fully under maintenance program in May, but it appears that the scale of maintenance is smaller than anticipated due to rising demand in China. For now, supply of polysilicon won’t change much; most polysilicon producers are reducing stocked inventories. Meanwhile, demand for polysilicon is weak as the inventory level of mono-Si wafer manufacturers is high. Therefore, it’s difficult for polysilicon prices for mono-Si wafers to hold up. While most polysilicon producers are busy delivering orders this week, a few manufacturers started requesting for quotes. Compared with prices in the previous week, polysilicon prices for mono-Si wafers declined by RMB 2-3/kg, with trading prices sitting at RMB 59-61/kg and average price at RMB 60/kg this week. It’s worth nothing that Longi lowered mono-Si wafer prices again in early May, and this suggests that polysilicon prices for mono-Si wafers may reduce further, especially those with higher level of inventory. It’s now highly likely that polysilicon prices for mono-Si wafer will fall under RMB 60/kg.
Polysilicon for multi-Si wafer was traded at RMB 30-32/kg and an average of RMB 31/kg this week due to continuous price decrease in multi-Si wafers and stocked inventory held by some polysilicon manufacturers. For overseas markets, polysilicon prices for mono- and multi-Si wafer have spiraled downwardly alongside Chinese prices, with the average price sitting at USD 6.9/kg and USD 5.2/kg, respectively.
China’s June 30 installation boom is not likely to lift demand for multi-Si wafers as most projects use mono-Si products. Meanwhile, as mono-Si wafer manufacturer giant lowered prices again recently, multi-Si wafer manufacturers are feeling increasingly downward price pressure. Therefore, multi-Si wafer prices declined this week, with trading prices coming in at RMB 1.1-1.2/piece and RMB 1.17/piece for average. Demand for multi-Si has certainly hit bottom, which is evidenced by the continuous downward trend since the end of Q1. With supply gradually decreasing and India going to open markets, multi-Si wafer prices are likely to stabilize at the end of the month.
Longi, the mono-Si wafer giant, lowered prices again after the Labor Day holiday, with G1 and M6 wafer prices decreasing by RMB 0.15/piece. As there was bigger price gap between gallium-doped and boron-doped wafers offered by Tier-2 manufacturers than those offered by Tier-1, Tier-2 manufacturers had grabbed more orders, with their stocks having been sold mostly. In contrast, Tier-1 manufacturers were unable to reduce inventories at that time. Since the lowered price level is coming close to the cash costs of Tier-2 and 3 manufacturers, most manufacturers would not lower prices.
Despite a pick-up in Chinese demand, the volume of installation was revised downward as the pandemic continues to rage overseas markets. As mono-Si wafer manufacturers are bringing new capacity online, the supply exceeds demand, and therefore prices are expected to slowly trend downward. This week, mono-Si wafer prices were reduced to RMB 2.45-2.67/piece for G1 and RMB 2.67-2.76/piece for M6, while that for overseas markets stood at USD 0.322-0.335/piece for G1 and USD 0.341-0.346/piece for M6.
After Longi lowered mono-Si wafer prices abruptly on May 9, some module manufacturers started pressing down cell prices. However, mono-Si cell prices are predicted to remain stable for the short term, given that overseas markets will gradually recover after the June 30 installation boom slows in China.
With the price upward trend having slowed down, cell prices remained unchanged this week, coming in at an average of RMB 0.79-0.8/W for G1- and M6-sied cells. As reduced wafer prices create more room for profitability for cell manufacturers, they can gain higher profits by just maintaining the high point of G1- and M6-sized cells at RMB 0.80-0.81/W. Mono-Si cell manufacturers began to sign orders for some overseas markets, with the trading prices averaging at USD 0.1/W. Impacted by the pandemic, most Southeast Asia-based manufacturers started contract manufacturing business or undersold their products earlier, but the situation has been eased recently, with prices stabilizing at USD 0.145-0.150/W.
As some delayed projects in China are based on M2 format, demand for M2-sized products has risen recently. This week the M2-based mono-Si cells were priced at RMB 0.77-0.78/W or even traded at RMB 0.79-0.8/W due to rising demand and decreasing supply. The cell prices will continue to increase for the short term, but decline again after the end of the installation boom.
With India extending the lockdown, it’s expected that demand for multi-Si cells will remain weak for the short term and prices will decline. At present, the Chinese prices fell to RMB 2.3-2.35/W or even lower at RMB 2.25-2.3/W.
Despite the return of June 30 installation rush, the total volume of installation is not significantly high as these are projects delayed from last year. Taking into account that overseas demand hasn’t picked up and India may extend lockdown again as the pandemic is not curbed, total module demand is not turning any better, and so the prices are still declining.
At present, prices for mono-Si modules based on G1 and M6 format are identical, with prices mostly sitting at RMB 1.6-1.63/W in China. The market also saw quotes lower than RMB 1.6/W for orders to be fulfilled in the second half of the year.
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