Polysilicon quotations had slightly fluctuated this week. With the end of the month approaching, most polysilicon businesses have started to negotiate for orders in November, and there has been a low level of concluded orders in the market after the release of the RMB 275/KG quotation last week. The mainstream prices for new orders are now centralized at RMB 266-272/KG. However, the supply of multi polysilicon that was already constrained is now further exacerbated under the Dual Control policy, where the quotations for partial sporadic orders continue to ascend, which is not accepted by the downstream sector. The RMB quotations for multi polysilicon projects will be removed starting from this week due to the further degree of diminishment in the existing transaction status that has resulted in a reduction of market share for the particular product.
An observation on the production, operation, and shipment status of the domestic polysilicon sector indicates that one among the 12 operating businesses continues to reduce production under the power restriction policy, with one additional business entering overhaul this week that totals five businesses in the overhaul phase. Four businesses that are currently under normal overhaul and maintenance are expected to resume production starting from early November. On the whole, power restrictions and regular business overhauls have lowered the domestic production volume of polysilicon to 42K tons compared to October that essentially conforms to the expected level. The supply of polysilicon will remain constrained in the fourth quarter, and the fluctuating pandemic status will impede the delivery of polysilicon, while the power restriction policy is going to affect the output of polysilicon in northwest China. Polysilicon prices are thus maintained at a high level in the subsequent market.
Wafer quotations remained stable amidst a weakening tendency this week, with a continuous wait-and-see attitude being adhered by the downstream sector. Wafer businesses are adopting differentiated market strategies. Vertically integrated businesses are lowering the operating rate in each segment due to downstream cost and shipment, and attempts to stabilize the upstream polysilicon prices, while a few professional businesses are still holding onto a relatively high operating level in their production lines through outsourcing orders after taking into account production and product profitability, which balances the current prices of wafers. The constantly decreasing operating rate from mid and downstream cell and module businesses is starting to create shipment pressure for the wafer sector. Wafer quotations are largely stable for new order enquiries in November, and incessantly rising polysilicon quotations may lead to another increase in market quotations for wafers due to a restricted degree of pressure acceptance.
M10 mono-Si wafer currently has a comparatively lower price at an average price of RMB 6.87/pc among all products, followed by a steadily enhancing intensity in recent shipment. Regarding orders, most businesses are starting to release quotations as the end of the month approaches, though the volume of actual concluded transactions remains on the lower end due to the increasing over-the-fence sentiment from the downstream sector. In terms of wafer output, Qinghai, Yunnan, and Inner Mongolia are continuously hindered in output by enduring a large degree of pressure from power restrictions.
Cell quotations had marginally fluctuated this week, with increases seen only in M10. Large-sized products have been smooth in shipment thanks to a higher cost performance ratio, though the concluded prices are predominantly constant to that of last week. Mono-Si M10 and G12 cells are sitting at mainstream concluded prices of RMB 1.15/W and roughly RMB 1.12/W respectively. Mono-Si G1 products have experienced slight turbulence in quotations, with signals pointing to an inflation within the market, though overall transactions have been proven difficult. As for multi-Si cells, the market quotation is stabilized at approximately RMB 0.9/W, where no apparent fluctuations are seen from the end demand.
A few businesses are transforming or terminating their 166 production lines due to factors such as an accumulated module inventory, diminishing demand for cell procurement, and power restrictions among businesses, and the competition for the subsequent large-sized cell market is expected to become gradually ferocious. In addition, cell businesses have been signing successive long-term contracts with upstream businesses in order to guarantee future supply of wafers.
Module quotations remained sturdy this week, with a low level of aggressiveness from the downstream sector in signing for orders. There had been fewer new signed orders this week after the upward adjustments in module quotations previously since end clients are unwilling to accept the inflated module prices under restricted space for profitability, though the contract prices of several module makers are still trailing behind market prices, which creates difficulties in executing orders. Module makers are now attempting to adjust their old order prices, followed by an apparent bargaining between the two parties, and the downstream sector is now obstructed in the willingness of stocking that has led to a reduction in new orders. A tendency of accumulating inventory is seen from module makers, who are now spontaneously lowering their level of production, especially with the double glass modules required by several postponed projects, which created sizable shipment pressure for businesses of auxiliary materials such as films and glass, and the prices of auxiliary materials are expected to compromise in November. On the other hand, China has been recently strengthening the policies regarding the instructions on grid connection for reserve projects, where guaranteed grid-connection projects and partial distributed projects are expected to transform into the primary dynamics for the demand of year-end installations.
Glass quotations remained stable this week, where 3.2mm and 2.0mm glasses are now RMB 27-31/㎡ and roughly RMB 20-23/㎡ respectively. The deceleration seen in procurement from the end sector has somewhat impacted the shipment of glass orders, where static surrounding price reduction has started exhibiting within the market.