Wafer makers operating at nearly full capacity; upward price trend continues for polysilicon

Polysilicon price

This week, as major manufacturers started signing large and long-term orders and saw less sporadic ones, mono-grade polysilicon were mostly traded at RMB 128-130/kg, even though price quotes have already hiked to RMB 130-140/kg on the market. Polysilicon shortage drove up the average price overseas, which has risen more markedly than that in China, to USD 17/kg, and will be continually increasing. Multi-grade polysilicon, on the other hand, saw little price increases as companies are still negotiating.  

Polysilicon prices remain on the rise despite the significantly reduced module production, posing more uncertainties to the market in the second half. With the market expecting Q3 to see a severer shortage, polysilicon prices may not drop back evidently as usual, even in low seasons.
 

Wafer price

The wafer sector has not seen evident impacts from cell and module makers’ lowered utilization rates; manufacturers that acquire enough polysilicon maintain full capacity utilization in the recent terms. With stable demand, prices this week stayed at RMB 3.78-3.8/piece in China and USD 0.518/piece in overseas markets for M6 wafers with 175um thickness as last week; RMB 4.56/piece and RMB 6.16/piece for M10 and G12 wafers with 175um thickness, respectively.

The continuous polysilicon price hike this week has once again increased costs for wafers. Cell manufacturers and module makers are both concerned about whether wafer prices will, in turn, rise as well. Presently, once wafer prices rise, the cell sector is expected to further trim down utilization rates to sustain cash cost. 

Multi-Si wafer prices saw a ripple effect of previous surge in polysilicon prices, having increased rapidly every week recently. This week, the trading prices rosed to RMB 1.7-1.9/piece, averaging around RMB 1.8/piece. Prices in the overseas markets are constantly increasing as well. 
 

Cell price

Overall prices for mono-Si cells stayed pretty much the same as last week after the Chinese Qingming Festival. Prices for G1 cells have started to slip later in March, with trading prices slightly declining this week, to RMB 0.88-0.93/W, averaging RMB 0.9-0.92/W, and high price range began to narrow down. Some cell makers have turned back to produce G1 cells, so the supply was more sufficient than expected. Overseas manufacturers are willing to purchase as well. As a result, G1 cell prices will see a rather moderate decrease in the first half of the year.

Stocked M6 cell inventory was relieved after module makers bottom fishing them at the end of March. This week, price quotes for M6 cells are estimated to increase by RMB 0.01/W, as cell makers gradually lower utilization rates due to line modifications and equipment maintenance, and as price hikes in the upstream continued.

Overall utilization rates for cells are estimated to be around 70-80%, which have decreased more slowly than that of modules, as the later has cut production significantly in April. In view of this, cell prices are not likely to rise and await wafer price fluctuations next week for further estimations.

Business of large cells still rely on OEM and dual distribution model at present; trading volumes are rather weak, with low direct purchase amounts. This week, the trading prices of M10 cells slipped to RMB 0.88-0.9/W and RMB 0.87-0.9/W for G12 cells.

Being affected by price hikes in the upstream, multi-Si cell prices continue to surge to RMB 3-3.2/piece.
 

Module price

Since Q2 end user demand fell behind expectations, utilization rates for most of the modules makers sit at around 60% this month. Regardless of lowered utilization rates, module makers still suffered from high inventory pressures, owing to its huge production capacity and weaker demand, which is estimated to be around 9-11 GW, still lower than module production. Module utilization rates are, consequently, not expected to see marked recovery in May. 

As inventory levels remained high and glass prices dropped significantly, mono-Si modules prices went down slightly in April. However, Tier-1 manufacturers’ modules with power output exceeding 500 W were mostly traded at RMB 1.68-1.72/W. Price quotes for orders to be fulfilled in Q2-Q3 stayed stable as polysilicon prices marginally increased.

With recovered demand in India and fewer suppliers, recent trading prices for multi-Si modules have risen to RMB 1.4-1.5/W, in response to price hikes in polysilicon, wafer, and cell sectors.