Power cuts in summer keep prices elevated

Polysilicon

Hot summer persists in August. Power supply from hydropower generation hubs is limited, but electricity demand increases. As a result, power crunch affects industrial power supply and distribution. In Sichuan and some other regions, industrial power rationing upsets the PV supply chain, causing declines in production volume to varying extents. 

Supply tightness of polysilicon continues. Due to power rationing in Sichuan, real silicon production volume this month will come in lower than the initially expected 72,000-73,000 MT. For now, power rationing will last from August 15 to August 20 or 22. Based on that, there should be a 1,800-2,300-MT decrease in monthly production volume. In August and September, the growth of real production volume remains slow. Prices keep advancing further, but at a relatively limited pace.

Prices for mono-grade polysilicon slightly pick up to RMB 296-309/kg. Having sealed long-term orders, manufacturers are delivering them recently. Prices come in higher for sporadic orders and traders. Some orders other than long-term orders are nearly signed at RMB 311/kg.

* Investigation of InfoLink covers polysilicon prices at which orders have been delivered from the previous Thursday to this Wednesday and have been signed recently. We track mainstream prices and provide feedback for the industry. Therefore, changes and future price trend will gradually emerge during periods of higher order volume. Prices for sporadic orders are to be heeded. 
 

Wafer

Subject to polysilicon shortage, the wafer sector keeps lower utilization rates. Meantime, industrial power rationing directly affects utilization rates of the ingot segment. In certain regions, productions almost halt entirely. Manufacturers can do nothing but wait for power supply to improve to resume production sometime between August 20 and August 22. 

The estimation of monthly mono-Si production volume, previously pegged at 26.9-27.8 GW, keeps declining due to power rationing. Mono-Si wafer production volume is limited. Gaps between different formats’ shares of production volume widen.  M10’s share rises faster, while that of M6 drops more significantly. 

Mainstream prices for mono-Si wafers stay at previous levels this week. Due to shrinking demand, prices for M6 wafers stumble, with low-price level slipping.

Summer heat strangles and affects industrial power supply to different degrees in regions across China. All attention is on whether power cuts will take toll on wafer demand.

Given limited wafer supply, upstream price trend remains rather domineering. Therefore, wafer prices are not likely to drop in the short term.
 

Cell

Several cell manufacturers have been receiving power rationing notice earlier this month. On August 15, Sichuan authorities imposed large-scale power cuts, intensifying supply bottleneck of the cell sector. 

Thanks to power rationing, mainstream trading prices sustain this week. Some Tier-2 module makers seal orders for M10 cells at RMB 1.3/W. Cell price trend appears steady for the time being. M6, M10, and G12 cells are traded at RMB 1.28/W, RMB 1.29-1.31/W, and RMB 1.27-1.28/W, respectively.

In the future, limited real production output will intensify short cell supply. Doubled with pandemic-induced logistic delays, prices for M10 cells may rise next week. When prices will start to slip requires further observation. 
 

Module

Module prices stagnate as demand wanes, and trading volume gradually declines in August. Some ground-mounted stock projects are purportedly initiated this week but posted small trading volumes. Currently, faced with lofty production costs and prices, neither module makers nor end users will give in. This week, module makers mostly deliver orders for C&I distributed projects.

Presently, glass-backsheet modules rated beyond 500 W are delivered at RMB 1.93-2.05/W (inland transport costs excluded) for distributed projects, and RMB 1.95-2.08/W (inland transport costs excluded) for utility-scale ground-mounted projects. New orders are few, sealed at RMB 1.95-1.97/W by utility-scale ground-mounted projects, and RMB 2/W by distributed projects.

For now, high temperature keeps supply chain prices elevated, with no easy way to drop in the short term. Still, module makers hope supply chain prices will fall back, bringing down production costs and allowing module prices to return to the level of RMB 1.9-1.95/W, so that module demand can recover.

In overseas markets, prices stay at last week’s level at USD 0.267-0.275/W (FOB) in the Asia-Pacific region, and USD 0.27-0.285/W in Australia. In the U.S., prices sustain at USD 0.34-0.38/W, and USD 0.55-0.58/W for locally made modules. In Europe, glass-backsheet modules rated beyond 500 W are delivered at USD 0.26-0.285/W, and USD 0.285-0.29/W on the spot market.
 

N-type cell and module

The market has yet to see many price quotes for n-type products. This week, prices remain at last week’s level. N-type cells are mainly purchased for in-house capacities, with few external sales. G12 HJT modules may be available by the end of the third quarter. We will decide whether we should post the spot price of G12 HJT products in the fourth quarter of the year, considering mass production activities of all manufacturers.

N-type cells are mostly purchased for in-house capacities, with not many external sales by far. Prices sustain at RMB 1.39-1.5/W for M6 HJT cells and sit at RMB 1.32-1.41/W for M10 and G12 TOPCon cells.

Module prices temporarily sustain this week, coming in at RMB 2.07-2.3/W for M6 HJT modules, and USD 0.29-0.33/W in overseas markets.

M10 and G12 TOPCon module prices stay where they were last week, at RMB 2.07-2.12/W for monofacial ones, RMB 2.1-2.17/W for bifacial ones, and around USD 0.28-0.31/W in overseas markets.