Mono-Si wafer prices hold ground amid shortage

Polysilicon Price

Polysilicon supply continues to grow as most manufacturers are running at full capacity in Q4. However, wafer makers are biding their time rather than purchase polysilicon now in order to prevent profit losses induced by stocked inventory. Some polysilicon makers, in the meantime, concede to price bargaining so as to reduce their bulging stocks. Polysilicon producers are executing contracts, but some Tier-1 manufacturers have procured small quantities of polysilicon, leading to a wide variety of prices in the market. So, the range of trading prices has been larger than before, and price bargaining is expected to take place within the next one week or two. This week, prices for mono-grade polysilicon were declining, with few deals clinched.

The trading prices came in at RMB 84–87/kg in the market and to RMB 86/kg on average, which was RMB 2/kg lower than the previous week. As new contracts are being signed, prices for mono-grade polysilicon will become clear. Overall, the prices will remain low until the end of this year.

Multi-grade polysilicon sustained a price decrease of RMB 1/kg at the high-and average-priced ends this week because of persistently low demand. Prices for multi-grade polysilicon were RMB 55–57/kg in the market and RMB 56/kg on average.

In non-Chinese markets, this week saw a new round of price negotiations take pace and sellers—hit by price decline in China and feeling pressured to reduce their stocks before the end of this year—cut prices to facilitate contract signing. So, prices for mono-grade polysilicon declined this week to USD 10–10.4/kg in the market and USD 10.2/kg on average. 
 

Wafer Price

Q4 sees an installation rush in China and abroad; several mono-Si wafer makers maintaining equipment, shutting down production, and commissioning new projects; and mono-Si wafer capacity additions—planned for the second half of the year and on a massive scale—coming online at a later time than expected due to a shortage of thermal-field carbon-carbon materials.

As a result, Tier-1 maker Longi’s December prices remain consistent with their previous levels for M6 (166 mm) and have grown by RMB 0.05/piece for G1 (158.75 mm) wafers. This week, G1 wafers were traded at RMB 3.1–3.15/piece, whereas that for M6 wafers sat at RMB 3.2–3.25/piece due to shortage. In non-Chinese markets, mono-Si wafer prices went up due to exchange-rate variations, arriving at USD 0.417–0.422/piece for G1 and USD 0.418–0.425/piece for M6. Since China’s Singles’ Day taking place on November 11, polysilicon prices have been trending downward whereas mono-Si wafer prices remain constant. However, mono-Si wafer prices may start to decline after the ongoing installation rush comes to an end at the end of this year. 

Since multi-Si wafer makers have been running at low capacity, a supply/demand balance will persist for a short period of time due to low end-market demand. After all, multi-Si wafer prices vary depending on end-market demand and polysilicon prices. With low-priced multi-Si wafers having sustained a small price decrease of RMB 0.03/piece in China this week and thus come in at RMB 1.2–1.55/piece in the market and RMB 1.3/piece on average, prices for multi-Si wafers abroad fell to USD 0.165–0.205/piece in the trading market and USD 0.18/piece on average. While multi-Si wafer makers focus on producing mid-to-high-efficiency wafers, the producers only make modest profits regardless of the wafer they produce. They are operating near the break-even point and minimizing losses.
 

Cell Price

Tier-1 maker Tongwei has lowered its December pricing for M6 and G1 cells; the company has also included a price quote for G12 (210 mm) in the mix. The prices for large cells announced recently point to a rapid shift in cell sizes and manufacturers increasingly speeding up their production of large cells to stay competitive. 

While there is some inventory draw for M6 cells, the price hikes in module auxiliary materials and pressure facing module makers led to relatively stable prices at RMB 0.93-0.94/W. However, as production lines that have been modified came online during October–November, the shortage of M6 cells may subside in December. Moreover, as there will be orders placed in the first half of December and mono-Si wafer prices show no sign of decline, the price for M6 cells may remain constant until mid-December. After that—and as the installation rush winds down—demand for M6 cells will shrink and their prices will go down.

The price for G1 cells sat at an average of RMB 0.85–0.86/W this week as previous contracts were still being executed. As the price for G1 wafers climbs and draw-in of G1 cells is picking up in China, some manufacturers have raised their price quotes for G1 cells by RMB 0.01–0.02/W. However, as the supply of G1 cells is going to dwindle, the price for G1 cells will remain stable until mid-December and then trend downward.

Multi-Si cell prices retained an average of RMB 2.5–2.6/piece this week due to weak demand. The prices cannot decline further, and how they will evolve depends on how multi-Si wafer prices will change.
 

Module Price

Even though module makers cannot make deliveries on time due to price hikes in module bill of materials, thus causing many PV projects to be postponed until next year, demand across the supply chain will remain stable in November to early December, allowing wafer and cell prices to stay stable and even pick up. Prices for PV glass, which receive wide attention, are in the midst of a new round of negotiation even though glass shortage has been easing among some module producers. So, price quotes for modules for the first half of next year remain constant as usual. This is why module prices in China and abroad are almost consistent in Q1 next year with their current levels, and some orders have small price increases.

After December’s installation boom comes to an end, module demand will start to shrink in Q1 next year, and prices for auxiliary materials (except for PV glass), high-priced wafers, and cells will all decrease accordingly, allowing costs of modules to reduce. Price quotes for M6-based modules have grown to RMB 1.65–1.7/W in the spot market along with price hikes in PV glass and orders signed at about RMB 1.6/W earlier are being executed. However, as next year will see prices for auxiliary materials decrease and new capacity come online, module prices may return to levels lower than RMB 1.55/W in Q2 next year.

As capacity will grow across the supply chain after the Chinese New Year holiday and module demand will decline after the installation boom, a product and price war is expected to repeat itself in the supply chain, prompting prices to resume their downward trends.