Polysilicon prices for mono-Si wafers continue to rise this week in the market, although by a marginally smaller extent than the previous week. Tier-1 makers have not signed much orders in batches; polysilicon prices are reportedly being raised. The market price ranged from RMB 82 to 85/kg and RMB 83/kg on average. Following the explosions at polysilicon factories in Xinjiang, the Chinese government has demanded that three local polysilicon makers (Daqo New Energy, TBEA, and East Hope) inspect their old production lines.
These producers have thus reduced their utilization rates for August; no official news has so far been released about when they will resume operation. Asia Silicon, a mega-tonne-scale manufacturer, will be maintaining its production lines in a sequential way this month, which will cause the production volume of polysilicon to dwindle by 400–500 tonnes between August and October.
Polysilicon supply looks set to hit its lowest level in Q3, but if Xinjiang-based polysilicon makers return to operate at full capacity in September and OCI’s Malaysia-based factory and Wacker Chemie AG resume operation, polysilicon shortage will start to ease as early as October. Without GCL’s Xinjiang-based factory in operation, polysilicon supply will fall short of meeting demand from wafer makers in Q4. However, polysilicon shortage will become less severe in Q4 than Q3, with prices expected to stabilize.
With a growing polysilicon shortage and increased prices for mono-Si wafers, producers that have produced low volume of multi-grade polysilicon refrained from selling their products. Moreover, with an anticipation of price increases, the trading price for polysilicon for multi-Si wafers rose to RMB 58–65/kg this week and RMB 60/kg on average.
Polysilicon deals recently clinched with overseas customers fetched higher prices after Chinese polysilicon prices surged. This week, overseas polysilicon prices went up to USD 9.7–10.1/kg for mono-Si wafers and USD 6.4–6.9/kg for multi-Si wafers.
Tier-1 mono-Si wafer manufacturer Longi raised its prices on July 24 and 31, respectively. After all, the shortage-induced polysilicon prices increase brought increasing costs to mono-Si wafer makers. Now, mono-Si wafer prices have risen by RMB 0.4–0.5/piece from the end of June, and this price increase includes the discounts that have been canceled.
That mono-Si wafer prices have increased markedly exerts greater pressure on cell and module makers. There is a wild array of mono-Si wafer prices in the market, but considering the price quotes offered by Tier-1 producers, the number of deals clinched is limited. Having said that, trading prices for mono-Si wafers have trended upward on the whole and will show a clearer trend next week.
This week, mono-Si wafer prices came in to RMB 2.63–2.9/piece for G1 and RMB 2.73–3.03/piece for M6 in China. In overseas markets, the prices were USD 0.331–0.365/piece for G1 and USD 0.347–0.381/piece for M6. The G1/M6 price gap grew to RMB 0.13/piece, an increase of RMB 0.04/piece from the end of June.
The surge in polysilicon prices for multi-Si wafers last week is reflected on multi-Si wafer prices, which now came in at RMB 1.5–1.6/piece in the market and RMB 1.55/piece on average. Orders for high-efficiency multi products are mostly delivered by vertically integrated producers. These producers will continue to deliver their orders despite recent increases in multi-Si wafer prices. Foreign prices for multi-Si wafers went up this week along with their Chinese equivalents, coming in at USD 0.197–0.209/piece and USD 0.203/piece on average.
Since Longi raised its prices for mono-Si wafers on July 31, the production cost of cells has increased by RMB 0.04–0.05/W, with price quotes having improved to RMB 0.91–0.93/W for G1 and RMB 0.93–0.95/W for M6. However, as module prices would not improve much, wafer prices are being negotiated, and fewer wafer deliveries were made, only a few cell orders were signed this week. Cell and module makers are still in the midst of negotiating prices.
Cell prices were consistent this week with their previous levels. The average cell price was RMB 0.88–0.89/W for G1 and RMB 0.9–0.91/W for M6. For urgent orders and smaller producers with weaker bargaining power, the price for high-priced G1 cells rose to RMB 0.92/W whereas that for high-priced M6 cells to RMB 0.93/W. The price for low-priced cells also climbed to RMB 0.85–0.86/W.
Although cell and module makers are still negotiating prices, cell prices are forecast to show a relatively clear trend during the SNEC PV Power Expo to be held on Aug. 8 through 10 in Shanghai. With module makers expected to reduce their dependence on outsourcing providers for cell production and instead putting their own cell production lines in service to meet their demand for cells, cell shortage is likely to ease prematurely and cell prices will achieve smaller increase.
Multi-Si cell prices climbed to an average of RMB 2.5/piece this week, as wafer prices continued to increase and India’s multi demand was recovering. However, with multi demand shrinking, multi-Si cell prices will not improve much.
As prices for cells, PV glass, ribbons, and EVA continue to increase, module costs are ballooning. Price quotes for modules have increased by RMB 0.1–0.15/W in China and USD 0.01/W in overseas markets, but few of such quotes have been agreed except for some recent utility-scale PV projects.
Module makers, now operating at a deficit, have stopped using outsourcing services and reduced their utilization rates, in hope of helping to ease the shortage of cells and auxiliary materials and gaining more bargaining power accordingly.
While module makers are running at diminished capacity utilization, a few end customers in China and overseas markets are unable to obtain enough modules from the orders they have placed. This creates chaos in the module segment.