Price hikes continue as productions drop under energy intensity dual-control policy

Polysilicon

Times were harder for polysilicon, of which supply has been short already, as some manufacturers ceased production due to power ratioing. Production volume in September fell short of expectations, sending price quotes on a continual upward trend.

Presently, price negotiations for October have yet to begin. No new orders were signed this week, with prices stabilizing at previous levels. However, power rationing will further affect polysilicon production output in October. Doubled with increasing production costs resulting from silicon powder shortage, manufacturers are poised to raise prices. Overall, prices are projected to go up in October. How high prices may go hinge on both polysilicon shortage and cost durability of end users, who will not accept successive module price hikes.
 

Wafer

After official pricings of leading mono-Si wafer manufacturer Longi soared, Zhonghuan sent notice of price increases to clients, with G1, M6, and G12 mono-Si wafers with a thickness of 170μm being priced at RMB 5.18/piece, RMB 5.28/piece, and RMB 8.33/piece, slightly lower than Longi’s pricings for G1, M6, and M10 wafers, which sat at RMB 5.24/piece, RMB 5.34/piece, and RMB 6.41/piece, respectively.

With ingot growing and slicing capacities being the more hard-hit segments by power rationing, as compared to the cell sector, wafer production volume fell short of that of cells, resulting in larger-than-expected wafer shortage. Buyers had no choice but to accept new pricings of the two wafer supermajors, whilst rest of the wafer manufacturers acted in accordance with Longi amid huge wafer scantiness.

Presently, rising wafer and BOM prices drove up module production costs, beginning to affect end user demand. In turn, professional cell manufactures struggle securing cash costs and are expected to reduce productions afterwards, in order to control wafer demand. 
Some multi-Si wafer makers set to raise prices last week, in response to slow polysilicon price hikes.

However, module makers could hardly accept price increases amid sluggish demand. This week, prices still sustained at previous levels, subjecting to polysilicon supply and end user demand afterwards.
 

Cell

With the Mid-Autumn Festival holidays ending this week, trading volumes were low as of this Wednesday. Orders for G1 and M6 cells were signed averagely at RMB 1.12-1.15/W and RMB 1.04-1.05/W, respectively. Meanwhile, average prices for M10 and G12 cells rose to RMB 1.07-1.08/W and RMB 1.02-1.04/W, in response to wafer price hikes.

Vertically integrated companies continued to slow cell purchases this week. Presently, medium and small-sized module makers accounted for most of the purchase volumes, with few orders being signed in the high price range, which sat at RMB 1.07/W for M6 cells, and RMB 1.09/W for M10 cells; procuring activity for M6 cells slacked off this week. The lofty cell prices are not expected to see much room for further increases. Besides impacts of wafer shortage and high production costs, Jiangsu-based cell manufacturers, being bound by the dual-control on energy intensity and consumption, will reduce production in the second half of September.

This week, prices for multi-Si cells remained at RMB 3.7-3.85/piece. Given difficulties in acquiring multi-Si wafers, future price trend required further observations.
 

Module

The module sector saw profits shrink continually as costs increased. Aside from price hikes across the supply chain, BOM prices stayed on higher levels, pushing up module costs further. Additionally, given EVA raw material shortage and the dual-control policy for energy intensity target, module makers will cut utilization rates from late September to October. Presently, some makers have reportedly pared down OEM volumes, which will consequently bring down cell purchase volumes afterwards.

Module prices appeared chaotic for the time being, with delivery prices of previously signed M6 glass-backsheet module orders sitting at RMB 1.78/W, and glass-backsheet modules rated beyond 500 W at RMB 1.8/W. Under pressures from current costs, module makers revised spot prices. As a result, new orders saw huge price differences with orders signed before.

This week, investigations found new orders for M6 glass-backsheet modules and glass-backsheet modules rated beyond 500 W being signed at RMB 1.8-1.82/W and RMB 1.83-1.85/W, respectively.

In overseas markets, utility-scale ground-mounted projects saw marginal price fluctuations. For now, prices for M6 and M10 modules averaged respectively at USD 0.24-0.242/W and USD 0.245-0.25/W. Few orders were signed, given end users’ limited cost durability, whilst negotiations for delivery deferrals of several orders took place.

Prices on the distribution market continued rising, with that for M6 modules in Europe coming in at EUR 0.2-0.215/W and may still go up by EUR 0.05/W in October; meanwhile, the Australian distribution market saw prices sitting at around USD 0.25-0.265/W. By far, as costs are seemingly staying on an upward trend, module prices from the fourth quarter of this year to the first quarter of next year will be fluctuating still. Outcomes of price negotiations remained unclear for the time being.