Order volume stays modest for early July; demand outlook depends on foreign market conditions
June 10, 2020 PV InfoLink
Since polysilicon prices for mono-Si wafers hit new historic lows in the previous weeks, coming close to the break-even points for Tier-1 makers’ older production lines and Tier-2 makers’ lines, manufacturers have become more keen to stabilize their prices now. With inventories at low levels, most polysilicon makers want to test the market waters by raising their persistently sluggish prices. But they hardly have any motivation to do so, considering that they are executing contracts and have half-year financial targets to reach by the end of this month. Even if they do, they could only lift prices by RMB 1/kg at most. Polysilicon prices will become relatively clear in mid- and late June, when new deals are expected to be struck. This week’s polysilicon prices for mono-Si wafers remained stable, sitting at RMB 58–60/kg in the market and averaging RMB 59/kg.
This week’s polysilicon prices for multi-Si wafers decreased fractionally to RMB 28–30/kg in the market and RMB 29/kg on average because demand was sapped by the low utilization rates among multi-Si wafer makers despite a handful of deals having been struck. Overseas polysilicon prices were down by USD 0.1/kg to USD 6.7/kg for mono-Si wafers and USD 4.6/kg for multi-Si wafers, as their Chinese equivalents dropped in the previous week.
Multi-Si wafer prices have been on the decline since early March and they have been spiraling downward since April due to a sharp fall in demand—hitting the break-event points of all producers. Multi-Si wafer supply has shrunk considerably as manufacturers are either closing down or operating under capacity. Meanwhile, demand for multi products is picking up recently, allowing the supply and demand for such products to balance. For now, multi-Si wafer prices are close to bottoming out and can no longer decrease. Multi-Si wafer prices stayed flat this week at RMB 1.05–1.15/piece in the market and RMB 1.1/piece on average. Overseas markets saw growing number of requests for quote from overseas cell makers, but no deal clinched. Multi-Si wafer prices sat at USD 0.15–0.154/piece and averaged USD 0.152/piece this week.
Mono-Si wafer prices stayed at RMB 2.36–2.52/piece for G1 and RMB 2.52–2.61/piece for M6 this week in China and USD 0.307–0.316/piece for G1 and USD 0.322–0.327 for M6 in overseas markets, as Tier-1 makers stuck with their prices. Mono-Si wafer prices have recently trended downward despite the June 30 installation boom in China. This was because mono-Si wafer producers have been operating at near-full capacity and bringing new capacity online amid the COVID-19 pandemic. With supply exceeding demand, Tier-1 makers are highly likely to cut their prices.
Mono-Si cell prices seem likely to remain stable for a short while in June due to June 30 installation boom. This week, the prices sat at RMB 0.79–0.8/W for G1 and rose fractionally to an average of RMB 0.8/W for M6. Overseas prices for both M6 and G1-sized cells stayed at an average of USD 0.1/W. Looking ahead, mono-Si cell prices will hold ground during July and August—because there will be stable demand from projects left from the June 30 installation boom as well as residential and ultra-high-voltage projects that are being installed. The recovering overseas markets will also slow the price decrease of mono-Si cells.
With a limited number of production lines in operation and a push to improve module wattage in the second half of this year, M6-sized cells will attract plenty of orders. Their prices will therefore remain stable and sustain less decrease than G1 ones. The price gap between M6 and G1-sized cells has come in at RMB 0.01/W.
This week’s prices for M2-sized mono-Si cells were consistent at RMB 0.79–0.8/W with those for G1-sized ones due to decreased number of producers and growing demand on June 30 installation boom. They reached a high of RMB 0.82/W for some deals but will no longer increase after the installation boom ends. Prices for M2-sized cells may gradually return to their downward trend as there will be some orders placed for such cells from overseas producers, which are shifting to different sizes of cells at a slower pace.
Multi-Si cell prices will remain stable for a short while as the COVID-19 pandemic is subsiding in the major market India and multi products are used in some projects in China. This week, the prices stayed at an average of RMB 2.25–2.3/piece in China. However, since multi-Si wafer supply is shrinking, this week saw multi-Si cell makers mull raising their prices—although the extent of this price increase will depend on how multi-Si wafer prices will change.
Demand in many overseas markets turned out better in Q2 than the level predicted at the beginning of the coronavirus outbreak. The return of June 30 installation rush allowed Tier-1 makers to operate at high capacity during May–June. Yet, as module production capacity has surged, price competition will become even more intense in the second half of this year, with bid prices for utility-scale projects having hit new lows and prices for 435–440 W modules for general PV projects to drop to RMB 1.45/W in China and USD 0.18/W in overseas markets. For now, the volume of module orders should hold up, as there will be some postponed projects from the June 30 installation boom and overseas markets are gradually recovering. However, the outlook for August will depend on how well the COVID-19 pandemic will be contained in overseas markets and how much demand there will be in China.
Meanwhile, the ongoing competition over module price and power output has prompted the shift from G1 to M6-based modules.
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Polysilicon prices go up as supply shrinks
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Module price competition intensifies as capacity ramps continue
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Manufacturers jostle to raise module power output in 2H20; demand for M6 keeps growing
Multi-Si cell prices will remain stable for a short while as demand is picking up.
M2 cells fare poorly in price as a result of weaker Chinese demand
Multi-Si cell prices are forecast to remain at the current levels for the short run
Cell prices fluctuate amid low utilization rate in module sector
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