PV glass price hikes push up module costs

Polysilicon

Having achieved less increase in the previous week, trading prices for mono-grade polysilicon prices became stable this week, staying at RMB 93–96/kg and  RMB 94/kg in average. Polysilicon producers continue to offer high price quotes, but because wafer makers prefer to stabilize prices and polysilicon producers in Xinjiang are resuming operation, polysilicon shortage is subsiding. After three consecutive price increases in previous months, prices published by Longi last week have remained stable.

So, wafer makers are reluctant to accept a polysilicon price that is above RMB 100/kg. As polysilicon prices stay high, wafer makers are less willing to place an order than to bide their time. On the whole, polysilicon production will grow by 4,000 tonnes in September, compared to August. Meanwhile, polysilicon prices for mono-Si wafers will be more likely to stabilize in September as overseas producers are returning to full capacity.

Polysilicon prices for multi-Si wafers climbed this week by RMB 1/kg, reaching RMB 65–69/kg in the market and RMB 67/kg on average. Polysilicon prices for multi-Si wafers are not going to increase much any time soon as multi-Si wafer prices and multi demand remain stable.

Overseas polysilicon prices were stable this week—as their Chinese equivalents were going steady, there were deadlines for making polysilicon deliveries overseas, few deals were clinched amid sellers’ reluctance to cut prices, and some price negotiations lasted longer than before. This week, overseas polysilicon prices held up at USD 10.2–10.7/kg for mono-Si wafers and USD 7.2–7.7/kg for multi-Si wafers.
 

Wafer 

Mono-Si wafer prices remained stable this week. Following Longi’s release of prices last week, another Tier-1 maker Zhonghuan Solar updated its prices a few days later. Zhonghuan Solar’s price quotes for G1 and M6 wafers were RMB 0.1/piece lower than Longi’s, so the trading prices for mono-Si wafers declined compared to last week’s levels, reaching RMB 3–3.08/piece for G1 and RMB 3.15–3.23/piece for M6.

Overall, as several polysilicon producers increase their supply, shortage of mono-grade polysilicon will be easing and polysilicon prices for mono-Si wafers have remained steady these days. Meanwhile, mono-Si wafer prices will hold up for a short period of time, as inventory level of all mono-Si wafer makers is healthy and some of them have reduced utilization rates in September.

Polysilicon prices for multi-Si wafers saw less increase for several weeks, limiting increases in multi-Si wafer prices. So, multi-Si wafer prices stayed flat this week in the Chinese market, traded at RMB 1.55–1.65/piece and RMB 1.6/piece on average. In overseas markets, the wafers were traded at USD 0.203–0.215/piece and USD 0.209/piece on average. Moreover, since profitability for multi-Si wafer producers is not bright and the supply/demand has balanced in the multi market recently, multi-Si wafer prices are not likely to fall too hard and too fast for the short term with limited capacity for multi-grade polysilicon and the prices are expected to remain stable in September.

For now, high-efficiency multi-Si wafers cost too much for cell producers and have an excessively low cost performance. This prompts most manufacturers, except for vertically integrated producers, to produce mid- and low-efficiency multi-Si wafers and some Tier-1 multi-Si wafer makers now produce high-efficiency products on a custom-order basis.
 

Cell 

Mono-Si cell prices declined substantially as module makers cut down on their cell procurement. Fewer deals were struck for G1 cells this week as the prices stayed at a high level and demand continues shifting to M6 cells. Consequently, inventories of G1 cells continue to pile up among Tier-2 and 3 makers and the prices keep falling. The average price for G1 cells came down to RMB 0.86–0.87/W this week and quoted at a low of RMB 0.85/W for some deals.

This week’s average price for M6 cells held ground at RMB 0.91–0.92/W and, for deals clinched by most Tier-1 makers, RMB 0.92–0.93/W, thanks to stable demand.

Decline in Chinese cell prices continued to penetrate abroad, although overseas cell prices sustained less decrease due to a weaker dollar. Thus, this week’s price for G1 cells was down to USD 0.113–0.115/W, whereas that for M6 cells dipped to USD 0.12/W.
Average prices of multi-Si cells will stay at RMB 2.6–2.65/piece for a short period of time. After all, multi-Si wafer prices will remain stable and sustain no decrease for a while, which entails high costs for cell producers and prevents multi-Si cell prices from declining too much.
 

Module 

*As glass-glass modules continue to grow in market share, InfoLink will cover the price quotes for 2-mm PV glass starting September.

As polysilicon and wafer prices stabilize and cell prices hold ground, developers are biding their time whether to procure modules. Module prices also stop trending higher and hovered at RMB 1.58–1.62/W.

While module prices are seeing less increase, the rapidly growing market share of glass-glass modules contributes to a shortage of PV glass. Moreover, with prices for the raw materials for PV glass going up, the price for 2-mm glass has increased to RMB 24/m2 this month whereas that for 3.2-mm glass has risen by 15% from RMB 26/m2 in August to RMB 30/m2. PV glass even fetch RMB 32–33/m2, considering that the glass is in a serious shortage.

Continued increases in PV glass prices and EVA prices have exerted considerable pressure on module makers. To fill orders for Q4 without a hitch, Tier-1 module makers have no choice but get their deliveries ready. But because end-market demand is being depressed by increases in module prices and Tier-1 makers are limiting their utilization rates and dispensing with outsourcing services in the face of rising costs, Tier-2 and Tier-3 makers are running at low capacity. So, production of modules has yet picked up although price increase for modules has been slowing down since August.