Price gap of M6 cells widen between Tier-1 and Tier-2 manufacturers

Polysilicon

Market prices for mono-grade polysilicon climbed by RMB 1/kg this week to RMB 83–86/kg and RMB 84/kg on average. There is an ongoing rush to stock up on mono-grade polysilicon for mono-Si wafer production ahead of the Chinese New Year and some mono-Si wafer producers continue to procure polysilicon. Meanwhile, as most polysilicon manufacturers have low stocks of mono-grade polysilicon, price quotes for the polysilicon have risen for several weeks and many suppliers offer higher price quotes.

Consequently, mono-grade polysilicon is sold at a variety of prices, with a few deals clinched at RMB 85–90/kg and even higher levels. Most suppliers are still delivering previous orders. Tier-1 mono-Si wafer makers, which still have polysilicon stocks and are fully booked for January, are less willing to buy additional polysilicon. So, negotiations over new deals for mono-grade polysilicon will not begin until the middle of the month. On the whole, polysilicon prices are not going to increase much in Q1, as weakened demand pushes module producers to reduce their utilization rates and cell prices are expected to decrease.

Multi-grade polysilicon rose by RMB 3/kg this week amid price hikes in mono-grade polysilicon, coming in at RMB 53–56/kg on the market and RMB 54/kg on average. Polysilicon prices also increased this week in non-Chinese markets as Chinese polysilicon prices had picked up, customers had anticipated price hikes, and new deals had been struck. So, the trading price was USD 10.4–10.7/kg for mono-grade polysilicon and USD 6.6–7/kg for multi-grade polysilicon.
 

Wafer

Since mono-Si wafer manufacturers focus on producing large-format products, G1 wafers are decreasing in availability. But because there remains some demand for such wafers in non-Chinese markets every year, the wafer is running short in supply.

Prices for M6 cells have started to lose ground, but mono-Si wafer manufacturers did not lower prices much as their inventory level is healthy and most of them have signed orders for this month. As a result, mono-Si wafers were traded at high levels this week across different formats: RMB 3.11–3.14/piece for G1, RMB 3.2–3.24/piece for M6, RMB 3.87–3.9/piece for M10, and RMB 5.48/piece for G12 in China and USD 0.418–0.422/piece for G1 and USD 0.432–0.436/piece for M6 in non-Chinese markets.

Overall, as mono-Si wafer shortage continues to persist and manufacturers are delivering orders ahead of time per customer request, mono-Si wafer prices will remain stable until the end of this month.

This week, the market price for mono-Si wafers sat at RMB 1.18–1.49/piece in China and USD 0.162–0.2/piece abroad. The number of orders for multi-Si wafers is modest this month; manufacturers have scheduled production according to the number of orders they receive. Therefore, multi-Si wafer supply is going steady, for now. Yet, with the market share of multi-Si wafers being taken away by mono-Si ones, multi demand is diminishing, which will make multi-Si wafers increasingly obscure on the market.
 

Cell

Price bargaining over mono-Si cells continued into this week, with prices for G1 cells having dropped to RMB 0.9–0.92/W and that for M6 cells having dwindled to RMB 0.9–0.94/W for deals already struck. Meanwhile, M10 and G12 prices remained constant as the number of buyers had increased fractionally. Mono-Si cell prices in the dollar term picked up this week as the dollar strengthened and a possibility for slow price decline.

The G1 cell price hovered at RMB 0.9–0.91/W this week. With dwindling supply and a rush to stock up ahead of the Chinese New Year, prices may climb this month to as high as RMB 0.93/W, but it will start to decrease after the Chinese New Year draws to a close in mid-February. M6 cells see a variety of prices, not least because utilization rates are lowered among module makers and their buying of M6 cells has slowed.

Consequently, the trading price for M6 cells has plunged by RMB 0.03–0.07/W to RMB 0.84–0.93/W. The price gap between Tier-1 and Tier-2 producers has therefore widened again. Tier-1 makers strike deals at RMB 0.9–0.93/W, whereas Tier-2 producers undersold at RMB 0.82–0.84/W. Buyers and sellers remain in standoff for January orders for M6 cells, whose price may stay at RMB 0.85/W among Tier-1 makers until the Chinese New Year.

Prices for large cells decreased fractionally this week due to downward price pressure from module producers. The average prices for M10 and G12 cells dropped to RMB 0.94–0.95/W and RMB 0.95–0.96/W, respectively. M10 cell prices will stay within a certain range and sustain less decline in January, considering that it is difficult to procure large wafers with size enlargement still at its infancy and the number of module manufacturers seeking to procure the M10 cell—although the procurement quantity has just begun to increase—will pick up starting this month. Demand for multi-Si cells is low, with their price having stayed at RMB 2.4–2.45/piece this week. As multi-Si cell prices can hardly decrease any further, the prices are subject to how wafer prices are evolving.
 

Module

As prices for module bill of materials remain at a higher level this month and Tier-1 cell makers prevent cell prices from declining too fast before the Chinese New Year, module production costs can hardly be improved during January–February. Module prices remain consistent with their levels at the end of last year: RMB 1.62–1.7/W or USD 0.21–0.225/W. The spot prices are still higher—USD 0.22–0.23/W for newly clinched deals for 166mm-modules. 

Production of M10 and G12-based modules continues to grow. Deals clinched last year for ground-mounted projects and due to be executed in Q1 this year fetch USD 0.225–0.23/W, depending on the project size and delivery deadline.

On the demand side, customers in non-Chinese markets are still biding their time over module procurement—considering that shipping prices surged in Europe, the U.S., and South America around Christmas, shortage of containers will not ease until after Q1, and foreign spot prices remain persistently high as the Renminbi is appreciating against the dollar. Consequently, there have been only a handful of new module deals clinched recently, and module demand may show signs of decline after the Chinese New Year.