Market Effect After Mono Wafer Prices Drop

Poly Price

The polysilicon market continued to witness decline in prices this week. The average trading price of polysilicon for multi wafer use dropped to RMB 76/kg in China. Taking the cost into account, some polysilicon makers have lowered their supplies due to the equipment maintenance or production suspension. Prices are not likely to drop to the bottom in the short run and will have certain level of support. 

The mainstream prices of polysilicon for mono wafer use stabilized at RMB 85/kg. But compared to last week, the highest/lowest prices have slightly declined. It’s estimated that the price downtrend will continue in November after mono wafer price is revised downward. 

The polysilicon market witnessed weak trading volume in the overseas because overseas wafer makers are running at low utilization rates. Both buyers and sellers are passive, widening the price range. The average trading price in the overseas reached US$ 9/kg this week; some are even lower than US$ 9/kg.
 

Wafer Price

Spot price this week focuses on low-resistance wafers in order to respond to the demand changes in the market. 

Both mono and multi wafer markets saw average demand. Chinese multi wafer prices remained at RMB 2.1-2.15/piece. Following the lower supplies during China’s long holidays, second-tier wafer makers experienced low utilization rate. In addition to that, future polysilicon prices for multi wafer use will have support, and therefore multi wafer prices are forecasted to remain stable. For the overseas, multi wafer is priced at US$ 0.275-0.280/piece. Since the trading volume of multi wafers remained weak in the overseas, prices will drop to a level closer to quotes in Chinese market.

For mono wafers, Longi announced to lower prices again starting from late-July. The average trading price reached RMB 3.05/piece for 180μm wafers and RMB 3.1/piece for low-resistance wafers. As the average price of multi wafers stabilized at RMB 2.1-2.15/piece, the price gap between mono and multi wafers has returned to RMB 0.95-1/piece. It was originally projected that Longi won’t conduct price reduction until November. As a consequence, the fall in polysilicon prices provided enough space for Longi to lower prices. Longi’s price reduction also revealed that manufacturers will hold conservative attitudes toward future market. With the continuous downtrend in polysilicon prices, the mono wafer market may still witness a slight decline in prices in November. 

Longi’s quotes in prices reached US$ 0.39/piece for low-resistance wafers in the overseas. Other mono wafer companies have followed suit. But because demand didn’t pick up, other mono wafer manufacturers are expecting to lower capacity utilization rate again.
 

Cell Price

Although the high-efficiency PERC cell market witnessed strong demand thanks to the “General Top Runner Program”, the mono PERC cell market with average efficiency also witnessed stable demand owing to a boom in installation at the end of this year. Yet, the decline in mono wafer prices has slowed down the price rise of mono PERC cells. The average trading price of bi-facial mono PERC cells with an efficiency of 21.5% reached RMB 1.25/W. Prices of 21.4% conventional mono PERC cells remained unchanged at US$ 0.146/W and RMB 1.1-1.16/piece. 

For both overseas and Chinese markets, mono PERC cells with an average efficiency will focus on the orders before the end of this year. As a result, demand of PERC cells with an average efficiency is likely to be weakened slightly starting from December. Current price is almost close to the highest point. 

In the case of multi cells, demand has slightly increased as many projects are rush to be completed before the end of this year in the overseas. But compared to the large capacity of multi cells, the multi market still suffers from oversupply. The average trading price of multi cells with an efficiency of 18.6% or above reached US$ 0.103-0.108/W and RMB 0.85-0.88/W. 
 

Module Price

There’s a boom in installation for the “General Top Runner Program” in Q4 in China. China also aims to complete the PV Poverty Alleviation and distributed generation projects before the end of this year. Meanwhile, Europe also placed many orders that have to be fulfilled before this year. All of these factors allowed Chinese vertically-integrated companies to witness strong demand. Module makers with a GW scale also experienced better-than-expected demand. Overall, Chinese module makers saw strong demand and high utilization rates.

However, despite the stable Chinese module prices in all projects, overseas module prices have slowly declined. Especially the European market, which has transformed into a market without any trade barrier after the MIP is terminated, has become a major battlefield for price slaughter. Many module makers that have not been involved in the European market before tried to seize market share by adopting a low-pricing strategy and therefore it’s common to see conventional multi module priced at US$ 0.215-0.225/W in Europe, widening the gap with top-tier manufacturers’ long term contract price of US$ 0.23-0.25/W. This also creates a contrast with mono PERC module with relatively stable prices.

Overall, like October, manufacturers may witness similar condition in November. Although the module market witnessed strong demand in Q4, they should be aware of harsher low season in 1Q19. It’s relatively important to have the amount of orders and stock under control by the end of this year.