After experiencing a steep drop last week, the market price for polysilicon for multi-Si wafer came in at RMB 52-56/kg this week, with the high price segment saw a slight decrease of RMB 1/kg. To reduce procurement expense of polysilicon in the face of weak multi-Si wafer prices, multi-Si wafer producers that are still operating began to purchase polysilicon mixing with lower grade ones, so the average price for polysilicon decreased to RMB 45-50/kg or even lower.
At present, the utilization rate is low among most multi-Si wafer manufactures; vertically integrated companies with in-house multi-Si wafer capacity also plan to cease production. These producers will leave the multi-Si supply chain consecutively, and their withdrawal will play a role in balancing supply and demand.
Given the current polysilicon price for multi-Si wafer, second and third-tier polysilicon makers who focus on producing polysilicon for multi-Si wafer are likely to start maintenance ahead of time or close production, in response to the stagnating market. As a result, a monopoly of polysilicon capacity is expected in the future.
Supply of polysilicon for mono-Si wafer has increased slightly ascribing to factors including new capacity coming online, increased portion of polysilicon producer for mono-Si wafer, and a healthy inventory level being maintained by end users before the end of the year. The high price segment therefore declined marginally to RMB 71-74/kg. Thanks to small currency fluctuations over these two weeks in overseas markets, polysilicon prices for mono- and multi-Si wafer remain stable, with the average price sitting at USD 8.4/kg and USD 6.7/kg, respectively.
The downward trend in multi-Si wafer prices continued into this week, with prices ranging from RMB 1.55-1.60/piece and the market price falling below RMB 1.6/piece. Although the price of polysilicon for multi-Si wafer started to reflect on multi-Si wafer segment recently, companies across the multi-Si supply chain are operating at a deficit.
With demand from end uses remaining sluggish, multi-Si wafer prices are unlikely to recover before the Chinese New Year. Since there’s demand for mid-efficiency wafers currently in China, top tier multi-Si wafer makers who did not produce such products previously also plan to produce small volumes this week. For now, the price difference between mid-efficiency wafer and multi-Si wafer now sits at RMB 0.2-0.25/piece.
This week, mono-Si wafer prices came in at RMB 2.95-3.06/piece, reflecting a rather stable market owing to steady end-user demand. As the market saw shortage of 158.75mm (G1) wafers recently, some small-sized producers are attempting to raise prices. This week, G1 wafers were traded at RMB 3.27-3.35/piece. To meet the growing demand for G1, manufacturers are increasing the production of such wafer. The share of production volume for G1 is predicted to exceed 60% next year. Mono-Si wafer prices are expected to remain stable until next week, when large mono-Si wafer manufacturers announce pricing for next month.
Since most manufacturers will start a new round of price negotiation next week, cell prices saw little movement this week. Multi-Si cell prices remain weak on sluggish demand, sitting at RMB 2.8-2.85/piece, or RMB 0.61/W. The trading price in overseas markets came in at USD 0.077-0.079/W. As polysilicon and wafer prices experienced a significant drop recently, the decreased wafer prices may reflect on the next round of price negotiation.
Demand from vertically integrated companies is high because some Chinese projects are rushing to connect to the grid by the end of the year and cell inventory draw by overseas markets is strong. Because of short supply of mono-Si cells and high demand level, Chinese mono PERC cell prices stay at RMB 0.95/W and RMB 0.98/W for G1 wafers. Prices for overseas markets also remain stable at the previous level.
However, as demand from Europe and the U.S. may weaken temporarily starting mid-December, whether this strong demand for mono-Si cells will persist depend on the number of Chinese projects delaying to next January. The overall market outlook is expected to become clear next week.
Manufacturers are reducing quotes on multi-Si modules for next year continuously due to weak demand and a slump in prices in upstream sector. The price of multi-Si modules to be supplied in the first half of 2020 has gone down to RMB 1.5/W.
Looking ahead, the fact that 400W becomes the most quoted wattage for high-efficiency module brought huge pressure to module suppliers, who will have to utilize 158.75mm full square mono wafer and adopt half-cut and MBB design, as well as BOM that can help improve efficiency, to meet the market demand for high power output. Therefore, the real shipment of modules coupling with half-cut and MBB layout is expected to increase each quarter next year.