Supply shortage driving multi-Si module prices rises

Poly Price

This week’s Chinese polysilicon prices hovered at RMB 72–75/kg for mono-Si wafers and RMB 44–51/kg for multi-Si wafers, as new deals were clinched in small numbers and most producers were filling old orders.

Few producers have started to negotiate orders for March, making it likely for polysilicon prices to arrive at more definite levels next week. While a handful of producers have sorted out supply shortage of silicon powder and bill of materials, as well as hiccups in logistics, China’s polysilicon production volume for March may still be affected.

Because of diminished supply, most polysilicon producers expect to raise their price quotes for new orders by around RMB 1/kg. Yet, the shortage of raw materials is easing, which will allow polysilicon supply to pick up and thus polysilicon prices to stabilize in the short run.

Foreign polysilicon prices did not change much this week, staying at USD 8.3/kg for mono-Si wafers and USD 6.7/kg for multi-Si wafers. While a recent dip in RMB against USD might have undermined the stability of foreign polysilicon prices for mono-Si and multi-Si wafers, its impact was offset by healthy overseas demand.
 

Wafer Price

Multi-Si wafer makers were operating with low utilization rates throughout February, with a few Tier-2 and 3 makers having closed amid the coronavirus outbreak. But the capacity utilization rates are expected to climb starting March, when many more workers will return to work and some demand will take place in the downstream sector. This week, Tier-1 makers signed new contracts, which saw Chinese multi-Si wafer prices hold up at RMB 1.43–1.57/piece and averaged RMB 1.55/piece. Their foreign equivalents were USD 0.2–0.205/piece and averaged USD 0.203/piece. 

The list prices published by Longi and Zhonghuan Solar for March are consistent with those for February. Chinese prices for M2 and G1-sized mono-Si wafers this week remain stable at RMB 2.98–3.08/piece and RMB 3.27–3.35/piece, respectively, whereas foreign prices were USD 0.385–3.93/piece for M2-sized mono-Si wafers and USD 0.42–0.428/piece for G1-sized ones.

Mono-Si wafer supply was running a bit low throughout February, not least because producers fell short of meeting module makers’ constant demand for different sizes. However, if the coronavirus epidemic subsides and new capacities come online, the supply would soon rebound.
 

Cell Price

Due to poor utilization rates among module makers, mono-Si cell makers were struggling to reduce their bulging inventories and therefore facing downward price pressure from the module sector. Consequently, this week’s prices for the M2-sized mono-Si cell declined to RMB 0.92–0.93/W, whereas that for the G1-sized mono-Si cell dropped to RMB 0.95–0.97/W. Foreign prices for M2 and G1-sized mono-Si cells sustained less decrease thanks to ongoing negotiations for a number of new orders, coming in at USD 0.118–0.119/W and USD 0.122–0.123/W, respectively.

Announced on February 25, Tongwei’s March list prices for M6 and G1-sized mono-Si cells are identical. This suggests the company’s move to speed up the shift from G1 to M6 in cell production.

This week’s market prices for multi-Si cells rose slightly to RMB 2.8–2.85/piece due to low utilization rates among manufacturers and Indian developers’ rush to install PV systems before the fiscal year ends. Forecast for multi-Si cell prices remains conservative as the supply of the cell takes time to pick up and demand for it will stay strong in the short run.
 

Module Price

Although production of module bill of materials are resuming, module producers are having the lowest utilization rate in the supply chain and they fail to keep up with overseas demand. Moreover, the knock-on effects of coronavirus epidemic on module supply seems to continue into March. Module shortage is getting worse as overseas plants are using up their modules; this will eventually prompt module prices to rise.

Both Japan and India demand for multi-Si modules, with the demand level high in the latter as the market enters a boom season. However, these modules—which generate limited profits—is now even lower in supply than mono-Si modules and further outstripped by demand. So, their prices have improved markedly these days, rebounding to a after-tax level of USD 0.235–0.24 in India.

Mono-Si modules are running lower than before. Yet, because most Tier-1 makers maintain production volumes at certain levels and they clinched many deals before the New Year holiday, urgent or small orders have enjoyed price increases and will continue to do so.