As the COVID-19 pandemic rages, stagnant end-market demand looks likely to continue into Q2, driving down prices across the supply chain these days. Wafer makers, which still have polysilicon in stock, shows less willingness to procure polysilicon. They are biding their time instead. With few deals clinched this week, Tier-1 polysilicon producers have begun price negotiations and the actual market price will be settled before the next week starts. Compared to their previous price level, polysilicon prices have dropped by RMB 2–3/kg and are highly likely to decline further.
This week’s polysilicon prices were down to RMB 70–73/kg and an average of RMB 71/kg for mono-Si wafers and RMB 40–42/kg and an average of RMB 41/kg for multi-Si wafers. As producers in other segments still hold stocked inventories, they are less likely to buy products from the upstream sector but will show greater expectations for price reduction. So, some polysilicon makers may have to conduct equipment maintenance to reduce their production, thereby stabilizing polysilicon prices.
Foreign polysilicon prices—hit by continued decreases in their Chinese equivalents despite a prevailing tendency to wait and see among the buyers—went down to USD 8.1/kg for mono-Si wafers and USD 6.5/kg for multi-Si wafers.
After India, a major multi market, imposed a national lockdown to prevent the spread of COVID-19, the timing of demand for multi-Si wafers has been delayed. Against this backdrop, some operating cell producers with inventories of multi-Si cells undertake production on a weekly or biweekly basis. This caused Tier-1 and 2 makers of multi-Si wafers to reduce their utilization rates this week. Multi-Si wafer prices will be trending downward throughout Q2 in response to low demand. This week, prices declined to RMB 1.25–1.38/piece in China, averaging RMB 1.35/piece; the market saw no multi-Si wafers trading at RMB 1.4/piece. In foreign markets, multi-Si wafer prices did not change much this week, coming in at USD 0.19–0.195/piece and averaging USD 0.192/piece.
The last time Longi re-announced their list prices one week apart was in early 2018. The company did it again now, which suggests that inventories across the supply chain continue to grow as end-market demand remains persistently weak. Mono-Si wafer makers stand a chance of earning greater profits, but their list prices showed downward trends this week, going down by RMB 0.15/piece for G1 and M6 wafers. M2 and G1 mono wafers were respectively RMB 2.8–3.03/piece and RMB 3.07–3.26/piece in China; USD 0.364–0.387/piece and USD 0.391–0.416/piece in foreign markets.
As end-market demand for M2-sized products is weakening and most mono-Si wafer makers have shifted to G1, the inventory of M2-sized products is being shrunk. Such products will be gradually phased out and made available only for customized orders. Meanwhile, prices for boron-doped wafers—hit by gallium-doped wafers, which share the same prices now—allow for considerable bargaining by downstream customers. Prices for boron-doped wafers continue to decrease among Tier-2 and 3 makers; the wafers are even traded at lower prices. Some mono-Si wafer producers may end up reducing their utilization rates as foreign module demand is weakening and a gloomy outlook is haunting prices across the supply chain.
With overseas demand expecting to pick up at a later time, prices for mono PERC cells continued to decline this week. Prices for M2-sized cells, which will hardly see any further decrease and are hit by weakening demand, sustained slower decline this week, reaching an average of RMB 0.82–0.84/W. Meanwhile, the average price for G1-sized cells was RMB 0.85–0.86/W. As the impact of the COVID-19 pandemic is rippling through upstream, foreign orders for mono-Si cells have started to decrease this week, resulting in poor prices, with M2-sized cells averaging USD 0.109/W and G1 averaging USD 0.11/W.
Chinese prices for multi-Si cells fell to RMB 2.55–2.6/piece this week. The decline was again due to a slump in demand following Indian’s national lockdown. Foreign prices for the cells remained unchanged because no deals were clinched.
Overall, as Tier-1 mono-Si wafer makers announced a price decrease today and module makers keep pressing price downwardly, mono-Si cell prices will continue to decline for the short term. Multi-Si cell prices may also do the same, although they are subject to how the Indian market fares in the days ahead.
As the pandemic continues to escalate overseas, foreign customers are biding their time. Manufacturers have been requested to put orders on hold and have signed very few new deals. There are no clear market prices for modules; not much business is taking place.
As there is no clue about how the COVID-19 pandemic is going to unfold down the road, Chinese module makers have no choice but to grab their shares in the domestic market. Consequently, prices for mono PERC modules have decreased to RMB 1.62–1.66/W and will decline further for the short term.
Considering how the pandemic is playing out, May and June might be the most difficult time of the year for the module market. As many are watching how things will unfold, the number of deals clinched may continue to decrease, making it likely for module stocks to bulge and utilization rates to change in the module sector and across the supply chain.
Amid the COVID-19 pandemic, foreign customers have either postponed the delivery of their orders or canceled them, and the impact of weakening foreign module demand has penetrated upstream, adding to the pressure on producers of cells and bill of materials to consider price reduction. PV glass has stayed at a market price of RMB 26/m2 since Tier-1 producers cut prices last week. But as foreign demand may decline between May and June, PV glass prices will be trending downward.