As ingot pulling capacity continue coming online, and more polysilicon makers will undertake equipment maintenance in Q3, polysilicon shortage will further intensify in June, driving up prices for recent orders.
This week, major manufacturers has been signing long-term orders, with trading prices markedly rising to RMB 195-220/kg; some orders were even signed at RMB 225/kg; mainstream prices sit at RMB 200-205/kg. In overseas markets, where prices are higher, trading prices rapidly surged amid severe shortage, closing at USD 27.5-28.5/kg.
Polysilicon prices can hardly rise amid current module prices, doubled with the SNEC looming, the market outlook is obscure. To hedge from sudden changes in the market, traders have gradually stopped raising prices and hoarding polysilicon.
Polysilicon prices continue surging, pressuring mid and downstream segments. The industry is concerned with the impact module demand may have to receive in the second half of this year and next year.
Mono ingot pulling capacity in the West saw 1-3 days of impacts after earthquakes hit Yunnan and Qinghai. Longi was more affected since it was closer to the epicenter. Overall, the earthquakes affected 1 GW of global wafer supply.
The earthquakes reenforced wafer shortage, enabling May prices for mono-Si wafers to reflect the soaring polysilicon prices. On 25 May, Longi released official pricings for G1, M6, and M10 wafers with a thickness of 170 um, each was priced at RMB 4.79, RMB 4.89, and RMB 5.87/piece, respectively. Recently, smaller wafer manufacturers, with higher production costs, offered price quotes at slightly higher levels than Longi.
High polysilicon prices accelerated wafer thinning process. M10 wafers will be switching from the original thickness of 175 um to 170 um during Q2-Q3.
As polysilicon shortage intensifies, it has become even more difficult to acquire multi-grade polysilicon, driving prices to go higher. Despite waning Indian end user demand due to the end of fiscal year and impacts of the pandemic, price hikes continue for multi-Si wafers amid polysilicon price surge. The recent trading prices came in at RMB 2.35-2.5/piece.
Amid ceaseless price hikes in the upstream sectors, on May 21, Tongwei announced to raise multi-Si cell prices to RMB 0.86/W, whilst mono-Si cells saw 9-10% of price increases, compared to pricings released on 11 May, with G1 cell prices being raised to RMB 1.1/W, M6 and G12 cell prices being raised to RMB 1.08/W.
Mono-Si cell prices exceeded RMB 1/W, with G1 cells being traded at RMB 1.07-1.1/W and cells of other formats traded at RMB 1.05-1.08/W. Some large module makers were setback by the high prices and stopped purchasing. Medium and small-scale manufacturers, restricted by own conditions and with not much of module production capacity, signed orders at prices higher by RMB 0.02-0.03/W than major manufacturers.
Price divergence emerged in the orders signed by Tier-1 and Tier-2 manufacturers. Trading volumes dropped from last week, as cell makers kept raising prices in recent terms, sending huge pressures onto the module sector. Presently, cell prices can hardly increase further, for further price increases will weaken downstream inventory draws.
Cell utilization rates will stay pretty much where they are now next month due to short wafer supply; in the meantime, overseas manufacturers will not be able to acquire sufficient wafers, putting cell makers in a difficult situation.
Average prices for multi-Si cells surged to RMB 3.85-4/piece, driven by upstream price hikes and a rather balanced supply-demand relationship. Given the lowered module utilization rates due to the pandemic in India and the limited cost durability of the module sector, prices will increase rather slowly afterwards.
The module sector saw slower price fluctuations, as compared to the polysilicon, wafer, and cell sectors. While module makers reflect continued price increases in polysilicon, trading prices mostly stayed at RMB 1.73-1.8/W for monofacial modules with a power output exceeding 500 W. Such prices, doubled with continually rising polysilicon, wafer, and cell prices, have slashed profits of module makers. It is thus expected for some module makers to further cut down utilization rates in June.
Overseas markets will see USD 0.01/W of price increase, driving overseas price quotes for modules with a power output exceeding 500 W to sit above USD 0.24/W.