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Module prices surge amid raw material price hikes across supply chain

October 13, 2021 PV InfoLink

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Polysilicon

Silicon metal prices surged to RMB 50-60/kg in the last week of September amid production cuts and manufacturers’ reluctance to sell. Few orders were signed between Tier-1 manufacturers before the National Day holidays, with some sporadic orders being sealed at RMB 240-260/kg. However, mainstream trading prices escalated to RMB 260-265/kg after the holidays, a 20% increase on the RMB 210-215/kg in September.

While silicon metal price rises have hit headwinds, direct impacts of dual-control policy for energy intensity on polysilicon output is widening. Given fears for polysilicon shortage and the coming of high demand season at the year’s end, polysilicon prices will stay on an upward trend in the short term, with price quotes heading towards RMB 270/kg and beyond. Still, such price hike will cease gradually, as the market believes silicon metal prices have reached a peak, and several PV stations projects are deferred due to increasing module prices.

Wafer

Polysilicon prices continue rising after the National Day holidays, pushing up production costs for mono-Si wafers. Leading mono-Si wafer manufacturers kept raising pricings markedly. On October 11, Longi lifted official pricings up for G1, M6, and M10 wafers with a thickness of 170um, which sat respectively at RMB 5.53/piece, RMB 5.73/piece, and RMB 6.87/piece, slightly lower than that of Zhonghuan as released on September 30, to which mainstream trading prices appeared closer for the time being. As prices for mono-Si wafers rose ceaselessly, more and more cell makers are faced with changes and challenges as to production costs, and thus remained in wait and see mode in recent terms.

The wafer sector saw utilization rates remaining at months low by far. Further developments hinges on the impacts of energy intensity dual-control policy and power rationing.

Cell

After the National Day holidays, Tongwei revised official pricings upwardly on Oct. 9 to RMB 1.12/W, with prices for 166mm cells stepping up by RMB 0.06/W. Prices for 210mm cells rose by RMB 0.08/W, namely 6-8% of increases. From the end of August onward, consecutive cell price hikes deferred procuring activities from major vertically integrated companies, with few new orders being signed by far. Purchase volumes of medium and small-sized module makers are not recovering this month, whereas some of them purchased at small amounts, in fears for further price hikes. This week, cell prices rose to RMB 1.12-1.14/W, with that of 166mm, 182mm, and 210mm cells sitting at RMB 1.12-1.14/W, RMB 1.14-1.17/W, and RMB 1.12/W, respectively. 

Utilization rates in the cell sector returned to previous low points at 50-70% in October. Cell capacity utilization of vertically integrated companies sat at 60-70%, whilst that of professional cell manufacturers plunged to 40-50%. In November, given downstream sectors’ low acceptance for price increases and continual rising momentum of prices in the upstream, the cell sector can hardly raise prices in accordance with increasing production costs, whilst utilization rates linger at lower levels.

This week, multi-Si cells saw sluggish demand; prices rose marginally owing to increasing costs, coming in at RMB 3.85-3.9/piece. Further price trends will be treated conservatively, amid difficulties in acquiring multi-Si wafers. 

Module

Module prices remained chaotic this week. Some module makers stopped offering price quotes, as production costs continued to rise rapidly. Tenders issued in China purportedly saw tender prices higher than RMB 2/W, even reaching RMB 2.25/W in the high-price range. In China, some distributed projects sealed orders with Tier-1 module makers at RMB 2.05-2.11/W, whilst Tier-2 maker saw RMB 0.02-0.05/W of price differences. However, prices for utility-scale ground-mounted projects were still under negotiations. With surging production costs and increased electricity prices, trading prices may rise accordingly to above RMB 2/W, with price quotes approaching to RMB 2.1/W.

Deliveries in overseas markets suspended, with buyers and sellers negotiating incessantly. Subject to end users’ limited cost durability, prices for utility-scale ground-mounted projects have yet to be settled. Price quotes kept going up in October, with that of modules rated beyond 500 W coming in at USD 0.28-0.29/W. Being stalled by the lofty prices, end users postponed projects in Europe and India. Presently, prices on the distribution market continued rising, with that for M6 modules coming in above USD 0.265-0.28/W in Europe and Australia. Production costs still saw rising momentum. As a result, module prices will fluctuate during 4Q21 and 1Q22, with outcomes of negotiations remaining obscured.

Supply chain and BOM prices saw significant increases amid energy intensity and consumption control. Whilst projects saw delivery delays, countries across the world are considering relaxing trade barriers. End users in India are negotiating with the government to put off the imposition of BCD next year. Additionally, initiation deadline in solar circumvention inquiries were extended to October 13; the 45-day window for inspection were also prolonged by a week.

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