Polysilicon prices continue to rise amid shrinking supply

Polysilicon

Polysilicon prices for mono-Si wafers remained stable this week, standing at RMB 59–61/kg in the market and RMB 60/kg on average. Tier-1 makers have clinched deals for this month and are in the midst of filling orders, while a handful of deals are being negotiated. The market prices at which most producers strike deals have risen fractionally compared to the previous week, getting closer to RMB 60/kg and even higher levels.

On the supply side, four producers are maintaining production equipment this month, and one of them is a Xinjiang-based polysilicon factory that has encountered an accident. So, polysilicon makers stand a higher chance of lifting their prices than in the previous week.

Overall, producers that underwent equipment maintenance in the previous weeks are resuming operation this month, whereas those that have begun equipment maintenance in the same month are running at low capacity. Against this backdrop, polysilicon supply is running a bit low. However, with mono-Si wafer prices trending downward and downstream producers showing a strong intention to ask for price reduction, polysilicon prices will not increase much. On the whole, the prices will climb steadily throughout July.

Polysilicon prices for multi-Si wafers increased this week to RMB 33–35/kg in the trading market and to an average of RMB 34/kg, as some producers had signed contracts for July in the week before. The prices may continue to rise for a short period of time because there is some demand from downstream while supply is diminishing. Overseas polysilicon prices climbed by USD 0.1/kg to USD 6.8/kg for mono-Si wafers and USD 4.7/kg for multi-Si wafers this week, as some producers have begun this week to negotiate delivery deadlines for orders in August and Chinese polysilicon prices picked up.
 

Wafer

Mono-Si wafer prices showed little change this week—hovering at RMB 2.26–2.42/piece for G1 and RMB 2.42–2.51/piece for M6 in China and USD 0.297–0.306/piece for G1 and USD 0.312–0.317/piece for M6 in overseas markets. While the list prices for mono-Si wafers announced by Tier-1 makers have been constant over the past two months, the trading prices are lower than price quotes offered across the market. With mono-Si wafer prices going down, upstream and downstream producers will expect the prices to decline further if Tier-1 wafer makers are still above their normal levels of inventory, new wafer production lines will come online as scheduled in the second half of this year, and wafer producers continue to run at full capacity.

Multi-Si wafer prices held up this week at RMB 1.08–1.17/piece and an average of RMB 1.12/piece, whereas high-end multi-Si wafers enjoyed a small increase of RMB 0.02/piece. Producers are receiving more orders than in June, so they have raised their utilization rates. This points to gradual improvements in demand for multi products. Moreover, as polysilicon prices for multi-Si wafers are improving due to shortage, multi-Si wafer prices are climbing—although the price increase is limited because multi-Si cell prices are struggling to pick up.
 

Cell

Mono-Si cell prices rose marginally this week. The volumes of cell orders for July–August are high and module makers are grabbing cells, as postponed PV projects in China will be installing during the months and overseas demand is recovering. So, the average price for M6 cells has improved to RMB 0.8–0.82/W, prompting that for G1 cells to increase to RMB 0.8–0.81/W. Prices for high-end mono-Si cells have been settled, reportedly coming in at RMB 0.82–0.83/W for G1 and RMB 0.84/W for M6.

Driven by new PV projects auctioned off in China in the second of this year, orders for M6 cells are surging in number. However, as cell production lines are shifting to M6, the shortage of M6 cells won’t ease until the shift is completed and new capacities come online in August. By then, prices for M6 cells are expected to go down slowly.

The M2-sized cell price stayed at RMB 0.82–0.83/W this week. The price has reached its peak of increase as the June 30 installation boom is coming to an end, and it will decline slowly after the boom is over.

Multi-Si cell prices remained stable at RMB 2.2–2.25/piece this week. India market is picking up, but multi-Si demand is being undermined by the ongoing turmoil in the ports and borders of the country. Moreover, as multi-Si wafer prices continue to show signs of increasing, the cost of multi-Si cells may balloon and multi-Si cell prices are thus not going to decline any further. Therefore, producers will turn to subcontract work and multi-Si cell prices will hold ground for a short period of time.
 

Module

As module demand in many overseas markets has been recovering since Q3, PV projects postponed in Q2 due to the COVID-19 pandemic have begun construction. Some projects failed to commission by the June 30 deadline will be installing in July–August; a similar phenomenon occurred last year. Against this background, module makers have been running at high capacity from May to July.

Moreover, demand for M6-based modules is strong—whether in China, which will be flourishing in the second half of this year, and Europe, whose demand will remain robust throughout the year. M6 has become the mainstream size.

Meanwhile, module producers’ utilization rates did not change much in Q2 after the virus broke out, and this has led to high module stocks for overseas markets and caused price quotes for the second half of this year to spiral downward. Yet, a recent improvement in overseas demand has allowed module stocks to dwindle and producers share a heightened expectation for demand pickup in the second half of this year. So, compared with several months ago, there are increasingly fewer downward-spiraling price quotes offered for the second half of this year. And record-low price quotes are no longer provided for Chinese or overseas customers.