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Photovoltaic Industry Price Trend: Robust Module Quotations Ferment for Inflation as Declining Pressure Persists for the Prices of G1 Products
2020-10-28   |  Editor:faye  |  188 Numbers

Polysilicon

The overall polysilicon market is currently on a declining trend as polysilicon prices continue to deplete this week. As the end of the month approaches, most polysilicon businesses have begun negotiating for the orders of next month as they gradually consume their inventory. According to the closing prices of the new orders that have been signed, both mono and multi polysilicon have exhibited a descending tendency. As of this week, the mainstream quotation for mono polysilicon is at RMB 88-94/kg, with the average price downward adjusted to RMB 89/kg, whereas the mainstream quotation for multi polysilicon sits at RMB 57-63/kg, with the average price also downward adjusted to RMB 60/kg. Overseas quotations for polysilicon have simultaneously recovered in the midst of the general declination of domestic polysilicon prices, where the average global price of polysilicon has been actuated to US$11.043/W. After undergoing three waves of downward price adjustments in October, the prices of mono and multi polysilicon have predominantly returned to the level of early August.

According to the production plan and the overhaul of production lines for polysilicon businesses, 2 out of 11 domestic polysilicon businesses currently remain at the overhaul phase, and the additional volume of domestic polysilicon production is primarily centralized on the released capacity of GCL-Poly and East Hope from production resumption, where the domestic production volume of polysilicon for October is expected to approach 35K tons, which is essentially constant to the average supply volume to the first quarter of 2020. In contrast to the concluded polysilicon transactions this week, the recovery of polysilicon prices is not derived from the contraction of downstream demand, but rather the gradual recuperation of polysilicon supply from partial businesses, as well as the increased inventory from a certain businesses due to the previous bargaining. As the polysilicon market continues to elevate the volume of supply, a continuously escalating provision of polysilicon is expected to be seen in October, and the overall polysilicon prices will potentially descend further.

Wafer

The quotations for wafer have been predominantly stable this week, where the overseas prices of mono and multi-Si wafers have been slightly risen. As disclosed by the quotations from leading wafer businesses at the end of the month, the domestic quotations for mono-Si wafers remain robust, and overseas quotations continue to rise in small degree, which propel the current domestic average prices for G1 and M6 to remain firmly at RMB 3.05/pc and 3.2/pc respectively, whereas the overseas quotations for G1 and M6 mono-Si wafers have been upward adjusted to US$0.399/pc and US$0.42/pc respectively. Due to the low profit for multi-Si wafer businesses, and the relatively weaker support for market demand, the domestic and overseas average prices are maintained sturdily at RMB 1.53/pc and US$0.207/pc under the previous market status of a simultaneous reduction in quantity and prices.

An observation on the current order status from the wafer market indicates that mono-Si wafer orders are still centralized on first-tier businesses, and the new orders that have been signed for next month have revealed that the closing prices for mono-Si high-efficiency wafers are more concentrated, with fewer orders concluded on high price levels. SME wafer businesses are relatively more vulnerable against the overall wafer price suppression from the downstream sector based on the reason of declining polysilicon quotations, thus they are forced to forfeit a small portion of profit. A wiggle room of RMB 0.05/pc remains for the actual closing price of the G1 mono-Si wafer market, even if the leading businesses have yet to lower the quotations for G1. Regarding multi-Si wafers, first-tier wafer businesses maintain solid quotations, whereas second and third-tier businesses have preserved a small degree of wiggle room in negotiations.

Cells

The quotations of cells have experienced minor fluctuations this week, and the price differentiation between G1 and M6 mono-Si cells has been apparent. With the successive signing of cell orders at the end of the month, the robust quotations from first-tier businesses have impelled the relatively stabilized prices of mono-Si high-efficiency cells, where only partial urgent orders have experienced an increase of roughly RMB 0.02/W. The overall demand for mono-Si cells continue to elevate in the fourth quarter, though the price difference between segmented products is gradually widening. The quotations for weak-and-semi-strong efficiency cells continue to descend, with larger intervals between closing prices. As the pressure of downward adjustments persists, the average price of G1 mono-Si cells has been depleted to RMB 0.83/W, and the figure has been further lowered to RMB 0.80-0.82/W for weaker second and third-tier businesses. The price of M6 mono-Si cells is maintained at RMB 0.9-0.97/W, with an average price of RMB 0.92/W.

The supply and demand for multi-Si cells has been relatively stabilized, with no major changes in prices, though the insignificant recovery in the demand has resulted in fewer profit degree in quotations, and the closing price is primarily at about RMB 0.55/W. A number of businesses have commented that they are considering shutting down production lines as they are yet to see an evident breaking point of demand.

Modules

The quotations for modules remain stable this week under the impact of rising prices in glass and EVA, where the average price of the 325-335 / 395-405W mono-Si PERC module sits firmly at RMB 1.54/W, and the mainstream price of the 355-365 / 425-435W mono-Si PERC module is at RMB 1.58-1.72/W, with an average price of RMB 1.62/W. First-tier businesses in particular are almost at the limit for the orders of November, and are experiencing unimpeded order issuances, where the quotations for partial small orders have increased, which is seen on the 425W mono-Si module with the quotation going as high as RMB 1.72/W. As for multi-Si modules, the average price of the 275-280 / 330-335W multi-Si module is at RMB 1.35/W, and apart from the predominantly constant quotations from a number of first-tier businesses, the quotations from second and third-tier module makers are unable to achieve unification, thus creating a larger quotation interval at RMB 1.3-1.38/W.

On the other hand, auxiliary materials for photovoltaic continue to increase in prices, where the latest average price for photovoltaic glass has exceeded RMB 40/㎡, and the elevated ratio in the demand for bifacial modules has aggravated the shortage of glass. The procurement of the module market on cells and auxiliary materials are negotiated based on the premise of stabilized module prices apart from M6, though partial module makers have reduced the operating rate in order to respond to the resonance in demand coming from domestic and overseas markets during the fourth quarter, the shortage in auxiliary materials, and the continuously escalated module costs. In addition, a new wave of inflation is being fermented by module makers, and the changes in module prices may be reflected in the subsequent market.

 
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