MIP terminated! European market orders will be shuffled

Poly

This week’s poly market came to a deadlock, as expected. Although September was around the corner, the buyer and seller still deferred significantly in prices, hence the few done deals in this week. Currently, polysilicon in both poly and wafer makers are low in inventory. As a result, which end sells or buys polysilicon first will determine future price trend. However, mono-Si wafer use price will be lower than average due to increased supply and low downstream demand in September; a price point of RMB 90/kg and above is expected. Multi-Si wafer use price is also likely to decrease in response to the price-down of multi-Si wafers, but the actual fluctuation remains to be determined by the utilization rates of multi-Si wafer makers. Only if their utilization rates undergo dramatic adjustments in late September will multi-Si wafer use have a larger window for price adjustments. Non-Chinese poly market has fallen into a situation where sellers sell high, forcing buyers to give up buying or buy high. As a result, the order volume was low; the price remained at US$ 10.6/kg and above.
 

Wafer

This week, the multi-Si wafer price have gone down, resting at RMB 2.35/pc with more room for further decrease. Low demand was the cause of this downfall. However, because the poly price has not gone down, the current price is a lot higher than the previous RMB 2.35/pc. The current price is supported by the large price-down of cutting. Thanks to the current OEM price, as well as the fact that some manufacturers continue production despite losing profit in order to maintain their utilization rates, the overall market price of wafers keeps going downwards. Judging from the current costs of top-tier wafer makers, further capacity decreases are possible if polysilicon is unable sell at lower prices. Downstream demand in September has not shown signs of increasing, and cell prices continue to fall, resulting in room for decrease in multi-Si wafer prices in the coming weeks. Non-Chinese multi-Si wafers mostly remain at previous level, and the decrease is not as steep as Chinese ones; however, the price trend of heading towards US$ 0.31/pc remains unchanged. The price decrease in non-Chinese markets will catch up with that in the Chinese market. Mono-Si wafer price currently remain at the previous level, but the demand in September is also unpromising due to the delay of the pull-in of Top Runner Program.
 

Cell

Price negotiations of cells for September have taken place, but most sessions currently stay at the negotiation stage, and few orders have been completed. Therefore, multi-Si cells fell to RMB 0.93-0.95/W, US$ 0.118- 0.12/W this week. However, the hearing of India’s safeguard measure has been postponed to September 19, so the uncertainty will lead to a constantly low demand for multi-Si cells. Another downfall is expected next week, as prices for September are being determined. Multi-Si wafers currently have limited room for decrease, which will worsen the loss of multi-Si cells.

The Minimum Import Price of the European Union has been suspended, sending ripple to the mono-Si PERC cell price. Cells made in Taiwan used to be exempted from the MIP, which allowed Taiwanese cells to be directly shipped to Europe, or packaged in Southeast Asia before being shipped to Europe. This has made the price of Taiwan-made PERC cells slightly higher than Chinese ones. Last week, Taiwanese mono-Si PERC cells averaged US$ 0.16-0.165/W, RMB 1.08-1.12/W. Without the MIP, cells from all markets are free of restriction, making EU’s cell prices lean towards China’s domestic prices. As a result, non-Chinese mono-Si PERC cells will have apparent downfall in September.  

In addition, according to InfoLink’s stats, 30% of Taiwan’s orders are contributed by the direct and indirect shipment to Europe. The reshuffle of EU’s demand for cells will not only pull down the price but also make an impact on Taiwan’s cell utilization rate. 
 

Module

The year 2018 is closing to its end, and the cell and module prices will continue to decline; at the same time the EU market is turning conservative. This shows that the cancellation of MIP will not affect the global demand in 2018. InfoLink foresees a total demand of 83GW in 2018, with the EU taking up 8.85GW.

Due to slower reaction than other markets, it is expected that this year’s European mono-Si PERC modules will only have a slight decrease. Due to direct competition among large and small companies, all module products will have apparent decrease.

Due previous downfall in cells, non-European PERC module prices continue to decrease, with 300W mono-Si PERC modules falling to US$ 0.26-0.3/W. After the MIP cancellation, not only the European market price will decline in order to compete with other non-Chinese markets. With fewer orders received by third-place module makers, the US market price will also suffer from another price cut.