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Growing polysilicon supply led to a slight price decrease

November 18, 2020 PV InfoLink

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Polysilicon prices

Prices for mono-grade polysilicon slipped this week to RMB 86–89/kg in the market and RMB 88/kg on average. Compared to the previous week, the average price was down RMB 1/kg and the trading price fell to under RMB 90/kg. It’s mid-November now, and deals are being executed. So, mono-Si wafer makers, which still have polysilicon in stock, show less willingness to negotiate prices, and only a handful of deals have recently struck. If Tier-1 mono-Si wafer producer Longi’s December prices—due to be announced next week—remain constant, prices for mono-grade polysilicon will sustain smaller decrease. If the pricing decline instead, then the polysilicon prices will sustain more decrease. On the whole, polysilicon producers are facing increased inventory as the supply of mono-grade polysilicon is growing markedly in Q4, while wafer makers continue to press prices downwardly, the prices will trend downward. 

Shrinking demand for high-efficiency multi products has prompted two producers in Inner Mongolia to maintain their production equipment. Only a few deals were clinched this week amid sluggish demand, causing prices for multi-grade polysilicon to drop to RMB 55–58/kg in the market and RMB 57/kg on average, down RMB 2/kg from the previous week.

In non-Chinese markets, several Tier-1 producers are in the midst of delivering their orders, so price negotiations will begin for new deals next week. The trading prices were stable this week—USD 10.1–10.6/kg for mono-grade polysilicon and USD 7.2–7.6/kg for multi-grade polysilicon in the market.

Wafer prices

The trading prices for mono-Si wafers were consistent this week with their previous levels, staying at RMB 3.03–3.08/piece for G1 and RMB 3.18–3.23/piece for M6 in China and USD 0.398–0.405/piece for G1 and USD 0.418–0.425/piece for M6. Despite a recent drop in prices for mono-grade polysilicon, there is healthy end-market demand in Q4, some mono-Si wafer makers have cut down on production, and new mono-Si wafer production lines are coming online at a slower pace than expected. So, there is a small shortage of mono-Si wafers, which makes it difficult for the wafers’ prices to decline. While Longi is going to publish its December prices, there will be some demand for mono-Si wafers for a short period of time and mono-Si wafer prices are thus likely to remain constant.

Multi-Si wafer supply is dwindling as producers continue to operate under capacity or even cut production. Since inventory draw of multi products remains weak amid shrinking demand, multi-Si wafer producers are operating on the edge of the break-even point. This week, the trading price for multi-Si wafers stayed at RMB 1.23–1.55/piece in China and USD 0.175–0.205/piece in non-Chinese markets. Multi-Si wafer prices are losing ground due to sluggish demand and the downward trend in prices for multi-grade polysilicon.

Cell prices

While mono-Si cell prices look likely to remain stable throughout November, some producers are already negotiating deals for December. With quite a few orders to be placed in the run-up to the December commissioning deadline and mono-Si wafer prices remaining stable, mono-Si cell prices are likely to stay steady until mid-December, after which demand will decrease and the prices will trend downward.

The price for M6 cells climbed this week to RMB 0.94–0.95/W at the high-priced end, due to a persistent shortage. However, the average price for M6 cells sat at RMB 0.93–0.935/W as module makers were dealing with price hikes in auxiliary materials.

High-efficiency G1 cell suppliers received more orders this month in domestic market due to a pickup in draw-in from Chinese customers. Moreover, decreasing supply of G1 cells allow its prices to stay at the current level. So, prices this week remain stable at RMB 0.85-0.86/W, with prices to decrease at a slow pace in the future.

The average price for multi-Si cells sat at RMB 2.5–2.6/piece this week due to modest demand. Since multi-Si cell prices will not decline any further, how they will fare depends on price change in the wafer sector. 

Module prices

To meet the explosive demand brought by the installation boom, module makers, which are busy with procuring materials and delivering orders, have only clinched a few new deals recently. However, the average prices for modules have improved fractionally because deals clinched earlier at low prices are postponed for execution until next year. The spot price for modules based on M6 wafers has climbed along with growing prices for PV glass to RMB 1.65–1.7/W, although previous deals clinched at around RMB 1.6/W are being executed. So, there exists a huge price gap on the part of M6-based modules. Prices for materials are not going to decline any time soon, considering that there might be a rush to stock up auxiliary materials before the Chinese New Year holiday. Module producers are also going to engage in another round of negotiations over glass prices next year. Although glass prices remain persistently high, price quotes on modules still remain stable early next year.

Module prices have showed no marked change these days, but there have been new developments among Tier-1 producers. In addition to their capacity plans for wafers, cells, and modules that have been announced since the second half of this year, top-ranked module makers are working with each other or securing long-term contracts, taking into account the ongoing forced labor issue in Xinjiang, lingering shortage of auxiliary materials, and the synergy of production capacities. Talk about module size competition is getting even more intense in the meantime.

As production capacity is expected to increase across the supply chain after the Chinese New Year holiday and module demand will decline after the installation boom, a product and price war will repeat itself in the supply chain, prompting prices to resume their downward trends.

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