Polysilicon prices plunge near break-even point

Polysilicon

Polysilicon price declines accelerate. The competition among manufacturers intensifies. Mono-grade polysilicon prices drop more significantly this week. Factoring in prices at which manufacturers deliver previous orders and seal new ones, mono-grade polysilicon prices are estimated at RMB 100/kg, a 15% week-on-week decrease, the most since January 2023.  Meantime, the low-price range reaches RMB 80/kg, closing in on the overall production costs and the break-even point. 

On the spot market, inventory level is obstinately high. Some manufacturers have inventory on hand that equals a one-month production, indicating huge sales pressures ever before seen. Given such an excess supply, sellers are eager to seal new orders and willing to give in on the price more than ever. Some leading manufacturers offer price quotes as low as RMB 84-90/kg for mono-grade polysilicon. For popcorn polysilicon, price quotes are RMB 8-12/W lower.  

Demand dwindles. Ｔhere are more business models, in addition to “confirm prices first, adjust deliveries later” and “sign first, adjust prices later.” Buyers are more aggressive in price negotiations, even when purchasing for downstream production.  

After the SNEC, price declines across the supply chain accelerate, especially in the upstream. The competition among leading manufacturers heats up as manufacturers add a large amount of new production capacity to the already massive existing capacity, pressuring their Tier-2 and Tier-3 peers and new entrants.   
 

Wafer

Manufacturers cut production in May. This month, vertically integrated companies keep utilization rates unchanged. Several professional manufacturers plan to reduce production output. However, as new production capacities come online, monthly production volume will sustain in June, indicating the discrepancy in production plans and sales strategies among manufacturers. 

The inventory level of mono-Si wafers stabilizes, even decreasing marginally. The ingot segment will adjust utilization rates if wafer prices keep getting closer to the break-even point. 

This week, prices come in at RMB 3.6/piece and RMB 5/piece for M10 and G12 wafers, decreasing by 8% and 13%, respectively, both greater declines than last week. As of this Wednesday, Tier-1 manufacturers traded M10 wafers at RMB 3.4-3.5/piece, with the low-price range dipping to RMB 3.2-3.25/piece. 

Despite recent production cuts, inventory level remains high. Wafer price trend follows supply-demand dynamics. But the sharp decline in polysilicon prices forces wafer manufacturers to make concessions. For now, they exchange wafers for cells through dual distribution and OEM businesses. The downward trend of wafer prices will continue if current surplus persists, and the scale of wafer production cuts remains.  
 

Cell

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

Cell prices continue falling this week, coming in at RMB 0.84-0.86/W and RMB 0.92-0.93/W for M10 and G12 cells, decreasing by 4.5% and 6.1%, respectively. The range of trading prices is larger due to the statistical time frame.

For M10 TOPCon cells, prices drop in line with wafer prices, coming in at RMB 0.95/W. N-type cell prices sustain RMB 0.1-0.11/W higher than p-type ones. Also affected by wafer price declines, the few suppliers of G12 HJT cells see prices drop to RMB 1.1/W. 

Presently, impacts of wafer price declines have yet to ripple fully to the cell sector. Manufacturers sustain profits, with the gross margin of large-format cells sitting as high as 30%. Most manufacturers will operate at full capacity and dedicate all capacity to external sales in June. Meantime, n-type production capacity keeps increasing. Future price trend is subject to utilization rates of module makers.    
 

Module

Prices continue to decline across the supply chain. For now, the module sector has an inventory overhang of one to two months, with some module makers planning to deplete inventory. 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, the average prices come in at RMB 1.6-1.63/W. For glass-glass ones, prices sit mostly at RMB 1.62-1.65/W.  Price difference keeps expanding, as pricing strategies vary a lot among module makers. The chaos will persist until July. Orders previously signed account for 50-60% of the total order volume this month. New orders will take up a larger share in July. 

Prices will change more drastically in the future.Tier-1 module makers want to sustain prices at RMB 1.54-1.58/W, whilst delivering some previous orders above RMB 1.6/W and new orders at RMB 1.5-1.55/W. Some module makers clear inventory at the low-price range, even lower than RMB 1.5/W this week. Average prices of Tier-2 and Tier-3 module makers vary a lot. Some of them want to sustain prices as their Tier-1 peers do, while some offer price quotes as low as RMB 1.45/W on the spot market. Overall, average module prices sit at RMB 1.5-1.55/W. 

Close to the projection last week, there is no significant increase in module production plans in June, considering the inventory level and the pace of depletion. Module makers reduce utilization rates by 5-10%, while some increase production. Overall, there will be 43-44 GW of module production in June, 1 GW more than that of the previous month. In overseas markets, power rationing in Vietnam causes the decrease in production output.  

In overseas markets, module makers deliver at USD 0.2-0.21/W (FOB) in June whilst sealing orders at RMB 0.18-0.19/W for the second half of the year. 

In Europe, module prices sit at USD 0.19-0.22/W. In distribution channels, prices sit in at USD 0.23-0.24/W. For non-China modules, prices remain 20-30% higher than those of Chinese brands. 

In the U.S., prices stabilize but are subject to change due to the fluctuating production volume in Southeast Asia. 

In India, module makers deliver locally made modules at USD 0.28-0.34/W. For modules imported from China and Southeast Asia, prices each come in at USD 0.2-0.22/W and USD 0.25-29/W (before tax).

G12 HJT module prices slip in line with price changes across the supply chain. Module makers deliver at RMB 1.75-1.85/W recently. In overseas markets, prices sit at USD 0.25-0.26/W for the time being. 

M10 TOPCon module prices lose ground this week, coming in at RMB 1.55-1.75/W, mostly at RMB 1.7-1.72/W. In non-China markets, prices hold steady at USD 0.21-0.22/W, with a premium of USD 0.005-0.012/W against prices for PERC modules.