Polysilicon supply becomes even shorter after the Lunar New Year holiday, with barely any inventory left among polysilicon manufacturers. In fear of polysilicon shortage that may affect utilization rates, mono-Si wafer makers started requesting for price quotes this week. However, very few polysilicon producers offered quotes, as they do not have polysilicon for sales. For now, polysilicon producers are busy delivering orders signed previously.
Although some buyers that need polysilicon urgently for production are willing to purchase with higher prices, the real trading volumes are still low. The trading activity will become clear by the first week of March. This week, mono-grade polysilicon prices hiked to RMB 95-99/kg in market price and RMB 97/kg in average.
Since January, polysilicon shortage, coupling with buyers’ hoarding of polysilicon and sellers’ unwillingness to sell, have prompted manufacturers to rise prices for mono-grade polysilicon amid panic buying. As supply of mono-grade polysilicon remains shortage, a few mono-Si wafer makers had to lower utilization rates with the lack of polysilicon. Overall, with inventory of polysilicon remaining low, mono-grade polysilicon prices continue to rise steadily.
Driven by increases in mono-grade polysilicon prices, multi-grade polysilicon also saw price increases this week, with the market prices sitting at RMB 57-59/kg and the average prices coming in at RMB 58/kg, up RMB 3/kg from the previous level.
In non-China markets, polysilicon prices also rose at different extents this week due to rising prices in China and buyers’ anticipation of price increases. Mono-grade polysilicon was traded at USD 12-12.4/kg, while multi-grade polysilicon was traded at USD 7.1-7.4/kg.
While leading mono-Si wafer manufacturer Longi has kept its pricing the same for February, mono-Si wafer prices rose before the Lunar New Year, driven by another Tier-1 manufacturer Zhonghuan Solar’s price increase in early February. So, prices for G1 and M6 wafers rose by RMB 0.1/piece, while M10 and G12 wafers increased to RMB 4.03/piece and RMB 5.6/piece, respectively.
Since the shortage of mono-grade polysilicon will last for a while, wafer manufacturers are trying to stock up as much polysilicon as possible to maintain utilization rates and fulfil cell demand. It’s expected that Tier-1 mono-Si wafer makers will keep their pricings stable.
This week polysilicon prices in China and abroad show little change compared with previous levels, with the market prices staying at RMB 1.15-1.53/W and USD 0.162-0.208/W, respectively. Multi-Si wafer makers reported modest demand in March, and they will run production based on order quantity. At present, supply of multi-Si wafers balance with demand. However, as supply of multi-Si wafers reduced before the Lunar New Year and multi-grade polysilicon prices were on the rise, multi-Si wafer prices are likely to rise in March.
Wafer prices rose on Feb. 5 due to short supply of polysilicon. Cell manufacturers planned to reflect the rising costs after the Lunar New Year. However, the price bargaining this week indicates that module makers are unable to accept price increases in the face of rising costs of materials and production pressure.
Cell manufacturers tried to keep the average prices at a certain level this week during negotiation this week, just as they did before the Lunar New Year. So, the average prices remain stable. Currently, cell manufacturers’ utilization rates remain unchanged from January. However, Tier-2 and 3 cell makers will be hit by the wafer shortage.
The trading prices of G1 cells ranged from RMB 0.89-0.93/W. The high-priced G1 cells rose to RMB 0.92-0.93/W in China and USD 0.125-0.129/W in overseas markets in response to price increases in the upstream segments.
Prices for M6 cells hovered at RMB 0.8-0.86/W. This week, the average prices stayed at RMB 0.83-0.85/W. The trading volumes of low-priced session reduced slightly.
Business of large cells still rely on OEM and dual distribution model at present; the overall prices move relatively slowly. This week, the trading prices of M10 cells stay stable at RMB 0.87-0.9/W and RMB 0.88-0.91/W for G12 cells.
Supply of multi-Si cells continue to shrink. And as wafer prices remain high, cell prices rose to RMB 2.5-2.6/W due to unbalanced supply and demand.
Bids for the procurement exercise for modules for 2021-2022 held by Guangzhou Development New Energy were published recently. Different from previous procurements, a ceiling price was set for the auction this time. Moreover, the auction saw a wide gap between bids offered by leading module makers and smaller-sized ones. This also reflects that Tier-1 manufacturers were trying to maintain module prices, while smaller businesses were active in offering bids.
With a surge in polysilicon prices, vertically integrated companies’ profits from the module business will shrink further. Moreover, costs of module bill of materials are more expensive than ever. Against this backdrop, some module manufacturers will lower utilization rates slightly.
Module manufacturers also anticipate for price decreases in glass. However, glass manufacturers currently have no inventory pressures, and so prices will stay unchanged despite price downward pressure from module makers.