Module prices up as price increases continue in the upstream sector
March 24, 2021 PV InfoLink
This week, most polysilicon manufacturers are in the midst of fulfilling previous orders; they are negotiating terms of order delivery for new orders. Despite some buyers’ anticipation, polysilicon manufacturers have yet to announce actual pricings due to ongoing shortage, and the trading prices won’t become clear until one or two weeks later. For now, sporadic orders were mostly placed at RMB 120-127/kg. Trading prices also rose to USD 15-16/kg in overseas markets, thanks to short supply.
With wafer manufacturers running at high utilization rates, demand for polysilicon remains strong. Moreover, some large polysilicon producers will be under maintenance program in April. In light of this, polysilicon prices are expected to rise marginally.
Cell manufacturers have not cut production and demand remains high, leaving mono-Si wafer manufacturers with barely no inventories. The market is now waiting for leading manufacturer Longi to release new pricings. So, prices this week stay unchanged. With cell prices struggling to break even, it’s not likely for wafer prices to rise further.
Multi-Si wafers, following a surge in multi-grade polysilicon prices and India’s demand recovery, started to reflect rising costs of polysilicon. Price quotes saw widening gap among manufacturers, with prices coming in at RMB 1.5-1.7/piece. However, as buyers and sellers are still negotiating, the real trading prices won’t be certain until next week.
This week saw stable mono-Si cell prices and no increase in module makers’ purchase volume, except for a few that purchased cells in advance in anticipation of further price increase in wafers. Most module manufacturers maintain their previous pace of procurement.
If wafer prices continue to rise, cell manufacturers will cut production and rise prices to test the water. However, as cell makers lower their utilization rates at a snail’s pace, cell production may still exceed module demand, making prices unable to keep rising. Therefore, PV InfoLink is conservative with short-term price forecast; the price movement will depend on wafer prices.
G1 cell prices were traded at RMB 0.9-0.97/W this week and averaged RMB 0.9-0.92/W. Inventory draw for G1 cells showed sign of slowing this week; demand for such cells will begin to shrink in April.
Some module makers started purchasing M6 cells in large volume, easing inventory pressure for cell manufacturers. This week, cell prices remained where they were last week, averaging RMB 0.85/W.
Business of large cells still rely on OEM and dual distribution model at present; the overall prices move relatively slowly. This week, the trading prices of M10 cells stay stable at RMB 0.88-0.9/W and RMB 0.89-0.91/W for G12 cells.
Prices for multi-Si cells surged this week, to RMB 2.8-3.1/piece, largely owing to multi-Si wafer price hikes and continually shrinking cell supply. Additionally, India, the primary multi-Si market, is to impose high tariffs next April, which will in turn propel inventory draws of the year.
As end user demand fell behind expectations during March and April, inventory levels for module makers rose after the Lunar New Year. In the meantime, module makers continued to cut production since the increasing polysilicon and wafer prices show no sign of stopping. Major module manufacturers see utilization rates under 70% during March and April and might not be running at full capacity even in May.
Module makers kept raising pricings to avoid deficits. Recent procurement prices also indicate evident increases in trading prices. Presently, M6 monofacial modules and larger format modules are mostly traded at RMB 1.65-1.7/W and around RMB 1.7/W respectively.
Not only spot prices rise, price quotes for orders to be fulfilled in Q2 and Q3 also remained relatively high. As module price hikes impinged the IRR of PV projects, whether module demand for the entire year will be affected still awaits further observations.
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News & Analysis
Downstream buyers, sellers remain in standoff amid soaring polysilicon, wafer prices
Since January, polysilicon shortage, coupling with buyers’ hoarding of polysilicon and sellers’ unwillingness to sell, have prompted manufacturers to rise prices for mono-grade polysilicon amid panic buying.
Cell prices not going up as module production further reduced
The polysilicon price surge urged major module makers to raise price quotes. Thus, the standoff between cell and module manufacturers has not been looking up. With reducing utilization rates of their in-house module lines, cell prices not going up.
Happy Chinese New Year! This week’s prices remain stable.
PV InfoLink website will stop updating during the Chinese New Year (Feb. 11 - 17)
Surging polysilicon prices add pressure to downstream segments
With panic buying pervades amid supply shortage fears, trading prices skyrocketed to RMB 102-105/kg. Presently, polysilicon from major manufacturers can be barely acquired even with RMB 105 per kilogram, according to several manufacturers.
Wafer makers operating at nearly full capacity; upward price trend continues for polysilicon
Prices and order volumes for wafers, cells, and modules still reflect pressures brought about by polysilicon price hikes resulting from its short supply.
Module utilization rates dropped further, driving up BOM inventory pressures
Due to high polysilicon and wafer prices, module manufacturers cut production in March and April. It have brought to module BOM and cell makers huge inventory pressures, which have sent the six-month-long high glass prices to decline markedly.