Surging polysilicon prices add pressure to downstream segments

Polysilicon

Manufacturers started to sign new orders this week. With polysilicon shortage worsening after the Lunar New Year, panic buying pervades amid supply shortage fears. Trading prices skyrocketed to RMB 102-105/kg, while prices slightly higher than RMB 110/kg were reported as well. Presently, polysilicon from major manufacturers can be barely acquired even with RMB 105 per kilogram, according to several manufacturers. The upward trend is expected to remain in the following week. Meanwhile, mono-grade polysilicon shortage sent  multi-grade polysilicon prices into a tailspin.

Foreign polysilicon prices trended up slightly amid polysilicon shortage and the markedly rising Chinese prices. Mono-grade polysilicon were mostly traded at USD13-13.5/kg. In face of mono-grade polysilicon shortage, multi-grade polysilicon will be used for mono ingot pulling, and thus enlarges the trading range.    
 

Wafer

As leading wafer manufacturers Longi and Zhonghuan released pricing, trading prices of mono-Si wafers hiked comprehensively. M6 wafers with thickness of 175um rose by RMB 0.31-0.32/piece to RMB 3.68-3.7/piece in China and were traded at USD 0.5-0.505/piece in overseas markets. Chinese large format wafers, M10 and G12, each with thickness of 175 um, were priced at around RMB 4.44/piece and RMB 6.16/piece, respectively. Both wafer and cell segments are accelerating thinning process amid polysilicon shortage and its increasing price.  

In China, multi-Si wafers prices also rose by RMB 0.1/piece to RMB 1.25-1.35/piece, in accordance with increases in polysilicon prices. With rising freight rates and exchange rate fluctuations, foreign multi-Si wafers also rose over USD 0.185/piece. Overall production output dropped further since it is difficult to acquire multi-grade polysilicon.  
 

Cell

As costs are driven up by touting price hikes from upstream supply lines, there is an RMB 0.05/W of increase in official pricings from leading cell manufacturers, signaling a future upward trend. However, negotiations between segments were not all fruitful. Only few orders were signed at slightly higher pricing since most module makers would not accept RMB 0.01-2/W of price increases.

Some module makers even cut production for March in response to price hikes over the supply chain. As upstream supplies remain tight over the short term, cell manufacturers are caught in the crossfire of rising prices from the upstream and reduced production in the downstream. As a result, some cell makers might cut production in late March.      

Overall, G1 cells were traded at RMB 0.9-0.93/W. Driven by higher upstream costs, high-priced cells rose to RMB 0.93-0.94/W, with more orders being signed at RMB 0.93/W. Market prices also rose to USD 0.124-127/W overseas.  

M6 cells were traded at RMB 0.83-0.86/W, with average prices sitting at RMB 0.84-0.85/W this week. A few new orders for March were signed at RMB 0.85/W. M6 cell prices are projected to be stable in the short term, as most module makers are bidding their time. Foreign markets saw higher volume of orders, with prices rising to USD $0.118-0.120/W. 

Larger format cells still rely on OEM and dual distribution model; direct purchase price stay relatively stable. This week, trading prices for M10 cells stay at RMB 0.88-0.9/W, while average prices for G12 sit at RMB 0.89-0.91/W.   

Disequilibrium caused by shrinking supplies of multi-Si cells and increases in wafer prices leads to marginal increases in cell prices to RMB 2.55-2.7/piece. 
 

Module

As prices for polysilicon surging and that of module BOM remaining high, major module manufacturers started to increase price quotes, and orders previously signed at lower prices are renegotiated. With market shares of major module manufacturers further expanding this year, module prices saw marginal grows in both China and non-China markets, despite end user’s dissatisfactory over many price increases from last year to this year.   

Even though glass manufacturers do not experience inventory pressure, glass prices began to fell back slightly, as module makers pressuring on the prices and some of them lowering utilization rates.