Price declines are certain as cell prices slip

Polysilicon

Manufacturers have been negotiating and signing new orders. However, the market landscape is changing increasingly fast as prices fall. 

As of November, buy-seller negotiations escalate in the upstream. Both sides were testing the water and failed to reach a consensus. Some previous orders have yet to be delivered completely. Therefore, upstream sectors only see moderate trading activities this week. Negotiations will intensify and last longer. 

Polysilicon inventory can hardly build up at the end of November. Still, as polysilicon production volume increases, and downstream demand ebbs next month, polysilicon inventory level will keep building up at the year's end. This will be the first increasing movement of polysilicon inventory over the recent two years.

* 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

Prices for mono-Si wafers fluctuate more evidently this week, after Longi and Zhonghuan adjected official pricings downwardly on November 24 and 27, respectively. 

As of this Wednesday, mono-Si wafers in mainstream formats see prices keep falling from levels of previous official pricings. For 182mm wafers with a thickness 150μm, prices drop below RMB 7.0/piece. The dip keeps dipping, but whether the decreased prices will please the cell sector remains uncertain. Overall, manufacturers of the upstream have much less say in price negotiations. 

As wafer prices rapidly decline, manufacturers demand cheaper polysilicon and are more likely to gradually trim down utilization rates of the ingot segment. Doubled with the Chinese Lunar New Year holiday, demand during December and January may be affected. 

As sales pressures increase at the end of the year, wafer manufacturers may rearrange terms of business collaboration agreements to improve the circulation of wafers on the market.  
 

Cell

Cell prices step on a sudden decline this week as last week expected. Prices lose ground even though there is no marked increase in supply volumes of large-format and high-efficiency cells. This is a result of weaker cell demand as module makers cut utilization rates for December. Tier-1 module makers lower utilization rates by 5-10%, and mid and small-scale ones by 15-20%.

Cell prices step on a sudden decline this week as last week expected. Prices lose ground even though there is no marked increase in supply volumes of large-format and high-efficiency cells. This is a result of weaker cell demand as module makers cut utilization rates for December. Tier-1 module makers lower utilization rates by 5-10%, and mid and small-scale ones by 15-20%.

Cell supply was tight in November. Still, instead of raising prices unlimitedly, leading cell manufacturers maintained fair relationships with clients. The outcome of that is positive at a time of current price declines and weak demand. Module makers appear cautious for now, mostly placing small orders in fear of having large amounts of inventory on hand as prices drop, and inventory draw slows down. 
 

Module

Trading activities have been decreasing markedly since last week. As winter nears, some projects are slowed down, even halted in Northern China, while the south still sees active installations. In some regions, end users are stalled by module prices and the expiration of the 2017 land usage policy. The market sentiment seems inconsistent in China. This year, installation schedules are vague. Developers initiate projects at leisure, despite the installation deadline. Recent rumors suggest that module prices should drop at the deadline early next year, deepening the cautiousness of end users.

The average price range declines marginally this week, coming in at RMB 1.88-2.03/W for glass-backsheet modules rated beyond 500 W, and RMB 1.92-2.05/W for glass-glass ones. Overall, price range will continue expanding in the fourth quarter. The market has seen module prices lower than RMB 1.9/W this week. 

This week, overseas markets are still disordered, mainly because of sluggish demand in the fourth quarter and serious project inertia. Prices are mixed as some regions manage to deplete piling inventories. For now, prices purportedly come in at USD 0.235/W. Module prices (FOB) fall marginally to USD 0.235-0.265/W in Europe, USD 0.24-0.25/W in the Asia Pacific region, and USD 0.235-0.25/W in Brazil. Local module prices in India translate to around USD 0.32-0.359/W (FOB). In the U.S., prices (DDP) come in at USD 0.41-0.44/W for Southeast Asian modules, and USD 0.5-0.58/W (DDP) for locally made modules.

Next year, the emergence of new players will intensify competition in the module sector worldwide. Some module makers offered price quotes as low as RMB 1.75-1.78/W and USD 0.22-0.23/W in the first half of the year. Such disarray will persist into next year. 
 

N-type cell and module

This week, prices remain at last week’s level. The market has yet to see mainstream prices for n-type products. Whether a new column for price quotes will be added depends on the mass production activities of all manufacturers in Q4. 

Sales of n-type cells are mainly purchased for in-house capacities, and only a few are external sales. Prices sustain at RMB 1.45-1.65/W for M6 HJT cells and sit at RMB 1.35-1.45/W for M10 and G12 TOPCon cells.

Module prices come in at RMB 2.1-2.2/W and USD 0.27-0.29/W in overseas markets for M6 HJT modules; RMB 2.2-2.4/W for G12 HJT modules; RMB 2.03-2.1/W and USD 0.26-0.27/W in overseas markets for M10 and G12 TOPCon modules.  

N-type and p-type modules will see a shrinking price gap next year. Meantime, PERC modules may see price differences with TOPCon and HJT modules narrow to within USD 0.01/W and USD 0.02-0.04/W, respectively.