Cell prices poised to drop as wafer inventory piles up

Polysilicon

This week’s spot price summary covers a longer time frame due to the Labor Day holiday. Market prices for polysilicon maintain a downward trend, declining faster after the holiday. Tier-1 manufactures lower price quotes for mono-grade polysilicon to RMB 152-165/kg. Prices for polysilicon of lower quality such as popcorn polysilicon and multi-grade polysilicon are even more dispersed. Polysilicon for n-type mono-Si production still sees a considerable price difference. The gap between price quotes of Tier-2 and Tier-3 manufacturers and their Tier-1 peers continues to expand, but the sales pressure and challenges persist. The market is less active in negotiating and placing orders.

Leading companies with downstream resources have an advantage in the integration and consumption of internal resources. For instance, the business model of utilizing in-house polysilicon for wafer OEM production facilitates faster inventory consumption. However, most manufacturers are incapable of self-consumption, putting them at risk of inventory pileup and sales pressure. There may be an escalated price war and challenges in quality in the latter half of the second quarter.

With concern about future price declines, polysilicon buyers have been checking on purchase volumes and controlling delivery progress to avoid inventory write-down. Coupled with the price slump of mono-Si wafers, establishing purchase strategies becomes even more intricate.
 

Wafer

Prices for mono-Si wafers began to dip in mid-April and have experienced a noticeable decline after the holiday. Prices for 182mm wafers drop to RMB 5.2-5.84/piece, while the high price range can no longer sustain. Mono-Si wafers, including those of Tier-1 manufacturers, have seen prices plunge to RMB 5.4/piece, as of this Wednesday., Given orders and deliveries covered during a longer time frame this week, InfoLink estimates average prices at RMB 5.5/piece.

Once again, wafer price quotes are updated almost on a daily basis, demonstrating an accelerated pace of changes. Prices for 210mm wafers drop to RMB 7.25-7.6/piece, and the average price to RMB 7.4/piece, with vast momentum and room for further declines.

Against this backdrop, mono-Si wafer manufacturers face inventory pileups and accumulated stocks. The inventory level is anticipated to reach 9.2-12.4 GW by mid-May, tantamount to 5-8 days of stocks. The situation is likely to exacerbate before the end of the month, becoming the key factor that afflicts the short-term supply and demand relationship in the wafer sector.
 

Cell

Despite exuberant demand and monthly output growth, prices for cells see a decline due to pressure transmitted from module manufacturers as wafer price declines.

Cell prices see an evident downturn this week, sitting at RMB 1.03-1.04/W and RMB 1.1-1.11/W for mainstream M10 and G12 formats, respectively, each decreasing 3.7% and 2.7%. In overseas markets, the decline in prices in dollar terms is milder as buyers adopt the locked-in exchange rate.

For TOPCon (M10) cells, prices drop in line with wafer prices, coming in at RMB 1.15-1.16/W. Yet, there is a huge disparity among manufacturers, as some deliver at RMB 1.18/W. Even with the declines, n-type cells sustain stable premiums against p-type ones. Despite lower trading volume, HJT (G12) cells see prices decreasing with that of M10 cells, sitting at RMB 1.3/W.

In spite of the decline in cell prices, module makers demand the cessation of supply until cell manufacturers offer new price quotes since wafer prices continue to fall. As of this Wednesday, M10 cell prices of some manufacturers have reportedly dropped to RMB 1/W. Next week, cell prices may continue decreasing, but the actual price range depends on the outcome of negotiations.
 

Module

In May, in addition to signs of price declines in the upstream, the compliance inspection and land issues reinforced the wait-and-see attitude among end users. Various factors have contributed to the postponement of the project scheduled to launch in the second quarter and slower-than-expected inventory depletion.

Previously high cell prices affect module production plans. In order to transmit the pressure to the upstream, several Tier-1 manufacturers trim down production plans for 210mm modules, whilst others cut overall production.

Still, some module makers are optimistic about future demand and n-type production increase, thus raising their planned production. Therefore, the planned production of modules remains unchanged from that in April, without previously anticipated increases.

Module prices dip this week as manufacturers began to cut prices. Glass-backsheet modules are delivered at RMB 1.62-1.75/W, mostly RMB 1.67-1.68/W. For glass-glass modules, prices mostly sit at RMB 1.69-1.7/W. The gap between prices of Tier-1 and that of the rest module makers remains distinct, as the latter is closer to the low-price range. Considering production costs, some manufacturers begin to adjust pricing strategies. Hopefully, there will be a steady price decline during the remainder of the second quarter.

In overseas markets, module prices slip. Module makers deliver orders at USD 0.2-0.22/W (FOB). In Europe, module prices sit at USD 0.21-0.215/W in April. In some channels, inventory piles up, with prices coming in at USD 0.23-0.24/W. Prices for Chinese modules remain 10-20% cheaper than those of non-China brands.

In the U.S., prices stabilize at USD 0.4-0.45/W (DDP) for modules imported from Southeast Asia, USD 0.38-0.4/W (DDP) for those imported by Tier-2 and Tier-3 module makers, and USD 0.55-0.6/W (DDP) for U.S.-made ones. In Latin America, prices slip to USD 0.21-0.215/W. In Australia, the Middle East and Africa, and Brazil, prices come in at USD 0.21-0.25/W, USD 0.20-0.22/W, and USD 0.195-0.226/W, respectively. In India, average module prices slip to USD 0.295/W for locally made modules, while delivering prices stay at USD 0.29-0.33/W. For modules imported from China and Southeast Asia, prices each come in at USD 0.215-0.22/W and USD 0.26-27/W (before tax).

For G12 HJT modules, prices temporarily stabilize at RMB 1.9-2/W this week. Future declines are likely as wafer and cell prices drop. In non-China markets, prices sustain at USD 0.25-0.26/W.

M10 TOPCon module prices lose ground this week, coming in at RMB 1.71-1.82/W, mostly at RMB 1.78-1.8/W. In non-China markets, prices hold steady at USD 0.23-0.24/W.