Cell, module utilization rates reduced markedly, sending pressure to the midstream segment

Polysilicon

Impacted by significant cut in utilization rates in the mid and downstream segments, the polysilicon market holds conservative attitude. Apart from polysilicon makers whose orders were placed with lower prices raised prices to the average level, the rest of manufacturers had no new quotes and trading activities. The price between large manufacturers stayed at RMB 200-208/kg.

After the Dragon Boat Festival, polysilicon buyers are not willing to accept high prices anymore. Consequently, sporadic orders priced at around RMB 220/kg are not accepted by customers. Overall, the average prices stay unchanged this week, whereas high prices and low prices slightly decreased, narrowing the overall trading price range.

Moreover, since most polysilicon makers are fulfilling previous orders, there’s no inventory pressure. Therefore, whether prices in the midstream segment will fall after negotiations has little impact on polysilicon prices; prices will remain stable in the short term.

Overseas markets saw no new orders signed this week following foreign polysilicon price spike.
 

Wafer

Leading mono-Si wafer maker Longi did not release new pricings in mid-June as expected. So, overall wafer prices stayed unchanged from last week. However, as cell and vertically integrated companies cut utilization rates further, and cell prices began to lose ground, Tier-2 manufacturers that have raised prices markedly earlier slightly lowered prices for some orders. Recently, Zhonghuan’s pricings are higher, whereas that of Longi are lower, thus new orders were mostly signed at a price within the range between the two large manufacturers’ pricings. 

Impacted by lower cell utilization rates, inventory draw for multi-Si wafers also weakened. Prices stayed flat this week.
 

Cell 

Low module utilization rates in June impacted cell orders, with the market bidding time. Large module manufacturers make no move to purchase, while Tier-2 and 3 makers reduce their purchase volumes, cell inventory has been piled up since the end of May. This week, most cell makers negotiated prices with prices slightly lower than RMB 1.05/W, with mono-Si cell prices declining to RMB 1.03-1.07/W. The low-price range saw small orders signing at RMB 1.03-1.04/W, while high-price range saw decreasing volume of orders signing at RMB 1.06-1.07/W. Overall, inventory draw for G1, M6, and G12 cells weakens steadily, whereas M10 trading volume is relatively higher.

Sluggish market continues to impact cell makers’ utilization rates. Some manufacturers cut utilization rates further this week to 40-50%. Cell prices also lose ground. However, they will not drop markedly but rather decline at a slow pace due to stable prices in the upstream segment.

Inventory draw for multi-Si cells has slowed because prices are high and India’s tariffs will end at the end of July. This week, prices fell to RMB 3.7-3.85/W. Given demand will continue to weaken and supply will decrease, multi-SI cell prices will gradually decline.
 

Module 

Following several rounds of price increases in polysilicon and wafer in May, monofacial modules rated beyond 500 W are traded at RMB 1.75-1.8/W, while spot orders and distributed ones are traded at RMB 1.8/W. Prices in overseas markets also rose to more than USD 0.25/W. With such a price level, Chinese projects and end users remain in negotiation standoff. Meanwhile, inventory draw from overseas markets has cooled down, making it difficult for module makers to raise prices again.

Projects in overseas markets, in the face of high module prices and surging ocean freight rates, are under huge cost pressure. Therefore, demand for July and August is low in overseas markets, while utility-scale projects in China will not get off the ground anytime soon. This will lead to a slack in demand between July and August. By then, module makers with higher inventory level will face higher pressure.