Wafer prices accelerate descent as polysilicon prices plateau

Polysilicon

After the National Day holiday, the market sentiment is peculiar among upstream sectors. Leading manufacturers seal orders of large volumes, of which delivery dates fall in the second half of October, some even between the end of October and early November. Therefore, as of this week, manufacturers are mostly delivering orders. Prices stabilize temporarily. Tier-2 manufacturers focus on deliveries as well, but the number of high-price orders has been decreasing.

After the holiday, mainstream prices for mono-grade polysilicon stabilize at RMB 83-91/kg, and prices for granular polysilicon sit at RMB 76-85/kg. To date, polysilicon inventory remains at a moderate level. In the fourth quarter, production volume increases as new capacities come online. Meanwhile, demand weakens as the ingot segment cuts utilization rates. Against this backdrop, inventory accumulation intensifies, and polysilicon prices will step on an evident downward trend in the latter part of the fourth quarter. 

Tight supply on the spot market and the pressure from buyers for deliveries ease off after the holiday. Buyers become passive towards order inquiries and negotiations in fear of price declines. The next round of price negotiations is likely to reach deadlocks.
 

Wafer

Since the latter half of September, professional wafer manufacturers have led the industry to plan for production curtailment against the backdrops of piled-up inventory and price plummets. In October, utilization rates of the ingot segment falls to 82-84%.

Wafer trading prices keep declining this week, coming in at RMB 2.78-2.8/piece and RMB 3.7/piece for p-type M10 and p-type G12 wafers, respectively. For n-type wafers, prices sit at RMB 2.88-2.9/piece for M10 ones. Due to vigorous demand for half-wafers, supply for n-type G12 wafers seems tight. For full-n-type G12 wafers, prices stabilize at RMB 4.2/piece, given most buyers are from non-China markets and that TOPCon cell manufacturers are few in China.

In the short term, wafer prices will continue declining slowly but with little room for further price drops as they near the break-even point. If manufacturers cut production as planned, prices may stabilize. Mild rebound resulting from excess production cuts are likely to reoccur.
 

Cell

After the Mid-Autumn Festival and the National Day holiday, cell trading prices continue plunging due to pressures from module price declines and rising cell inventory levels. Cell manufacturers stop giving quotes after offering lower quotes but in vain every day. Chaotic price trends among cells of high and low efficiency persist.

Cell prices slump this week by 4-7% from last week’s level to RMB 0.6/W and RMB 0.65/W for p-type M10 and G12 cells, respectively. Guided by leading module manufacturers, trading prices for p-type M10 and G12 cells renewed again today, each to RMB 0.58-0.59/W and RMB 0.6-0.61/W. The new trading price range will become mainstream trading later this week.

For n-type cells, M10 TOPCon cell prices decline by 4-5% to RMB 0.64-0.65/W. N-type cell prices are RMB 0.05/W higher than p-type ones. G12 HJT cells, mostly for in-house use and less for external sales, see prices stabilize at RMB 0.8/W.

With a superior price-performance ratio and the premium due to supply-demand mismatch, G12 cells post a 10% better profitability than M10 ones. As inventory piles up, whether markedly reduced prices can boost inventory depletion requires further observation. Future production cuts are likely.
 

Module

Given supply chain fluctuations and weaker-than-expected demand, module prices drop due to excess supply and the absence of a significant increase in global demand as projected before the holiday. End users return to a holding pattern. Average prices for glass-backsheet modules fall to RMB 1.15-1.18/W this week. Tier-1 module makers keep taking new orders at lower prices, more at RMB 1.14-1.15/W this week. Some Tier-2 and Tier-3 manufacturers sustain prices at RMB 1.18-1.2/W out of cost concerns. Still, the low-price range will purportedly approach RMB 1/W in the fourth quarter.

For non-China markets, Chinese exporters deliver products at USD 0.14-0.15/W (FOB). In Asia-Pacific, module makers deliver at USD 0.14-0.15/W. In India, prices for local modules come in at USD 0.23-0.25/W. In Europe, spot prices come in at EUR 0.13-0.15/W, with modules with black backsheets possessing a premium of EUR 0.01-0.02/W. With orders signed prior to deliveries, modules for ground-mounted projects in the U.S. see prices hold steady at USD 0.38-0.4/W (DDP). Presently, the price disparity between modules for ground-mounted projects and distributed generation projects is rather huge, sitting at USD 0.28-0.4/W (DDP).

For TOPCon n-type modules, prices come in at RMB 1.2-1.32/W with a premium of USD 0.008-0.01/W against PERC ones in non-China markets.

For HJT modules, prices are little changed, sitting at RMB 1.38-1.48/W in China and RMB 1.35-1.38/W for low-efficiency ones. In non-China markets, prices stabilize at USD 0.18-0.19/W.