Module prices to drop as upstream prices collapse

Polysilicon

Polysilicon prices continue plummeting after falling below RMB 100/kg. Factoring in prices of previous and new orders, mono-grade polysilicon prices sit at RMB 78/kg, a 22% week-on-week decline, the biggest since 2023. The low-price range approaches RMB 60/kg, closing in on the overall production cost, challenging the profitability of existing production capacities and returns in cash of the new ones.  

On the spot market, monthly polysilicon inventory reaches 120,000-130,000 MT, equaling a one-month production. A quick, complete depletion is unlikely. Manufacturers, big and small, bring new capacities online at different paces, adding to the glut of supply on the spot market.

Some manufacturers cut production, even suspending production this month. However, monthly production volume is estimated to increase to 53.5-54.5 GW, given massive existing production capacity and new ones coming online. Granular polysilicon production capacity expands, deepening the risk of a high inventory level and accelerating price declines. 
 

Wafer

Wafer prices continue falling this week, dropping near production costs. Leading manufacturers start offering price quotes cautiously, while Tier-2 and Tier-3 manufacturers continue updating price quotes frequently, resulting in a lower low-price range and a wider price gap. 

This week, prices come in at RMB 3.05/piece and RMB 4.65/piece for M10 and G12 wafers, decreasing by 15% and 7%, respectively, for there are fewer manufacturers of G12 wafers. As a result, G12 wafers lose their advantage over M10 ones in terms of price-performance ratio. As of this Wednesday, prices fell to RMB 2.8-3/piece for M10 wafers of Tier-2 and Tier-3 manufacturers, and G12 wafer prices dropped to RMB 4.2/piece.

Inventory is the fundamental reason for price declines. Presently, inventory level is on a slow decline but remains above 10 GW. Price drops have reached a point where they no longer affect inventory depletion effectively. As prices approach production costs, there is barely room for further price reductions, leaving manufacturers no choice but to lower utilization rates.
 

Cell

Cell prices drop due to wafer price declines, despite fair demand and monthly production output increasing to 46 GW. 

Cell prices continue falling this week, coming in at RMB 0.78-0.79/W and RMB 0.83-0.85/W for M10 and G12 cells, decreasing by 8-9%. 

For M10 TOPCon cells, prices drop in line with wafer prices, coming in at RMB 0.87/W. N-type cell prices sustain RMB 0.09/W higher than p-type ones. Also affected by wafer price declines, the few suppliers of G12 HJT cells see prices drop to RMB 1.05/W, potentially to RMB 1/W this week.  

Thanks to sustained demand, cell prices drop slower than wafer prices. Large-format cells still have fair profitability. Caught between two sectors that face decreasing profits, cell manufacturers may cut prices marginally. When wafer prices dip to the lowest, cell prices will be subject to not only wafer price trend but also utilization rates of module makers.    
   

Module

Both buyers and sellers are in a wait-and-see mode, affecting the progress of projects in China. New orders are delayed, and inventory depletion is slower than expected amid souring market sentiment. 

Module prices drop significantly this week. For glass-backsheet modules, average prices come in at RMB 1.45-1.48/W. Price difference keeps expanding, as pricing strategies vary hugely among module makers. Module makers manage to deliver previous orders at RMB 1.5-1.6/W while sealing new ones at much lower prices of RMB 1.4-1.45/W. Some clear inventory at the low-price range, even lower than RMB 1.4/W this week. The low-price range on the spot market now sits at RMB 1.35-1.38/W. There is a large disparity in prices among Tier-2 and Tier-3 module makers.  

Industry survey shows module makers reduce production plans by 5-10%, given inventory and order volumes for the time being. There is an estimated 42-43 GW of module production in June.  

The cautious market sentiment ripples across markets outside of China, where module makers deliver at USD 0.2 (FOB) in June and seal orders at USD 0.17-0.19/W for the second half of the year. 

G12 HJT module prices slip in line with price changes across the supply chain. Module makers deliver at RMB 1.7-1.78/W recently. In non-China markets, prices sit at USD 0.21-0.25/W for the time being. 

M10 TOPCon module prices lose ground this week, coming in at RMB 1.5-1.66/W. In non-China markets, prices hold steady at USD 0.2-0.23/W, with a premium of USD 0.005-0.012/W against prices for PERC modules.