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Sichuan’s Power Restrictions Affect Output of Polysilicon and Cells; Smaller Price Impact Seen from Non-Centralized Order Signing Period
2022-08-18   |  Editor:et_editor  |  330 Numbers

Polysilicon

Polysilicon prices had marginally risen this week, where mono-Si compound feedings and mono-Si dense materials were respectively concluded at a mainstream price of RMB 305/kg and RMB 303/kg. August orders were signed earlier this month, and the conclusion of sporadic and urgent orders continued to bump up the prices this week. Sichuan, due to the recent high temperature, has implemented a power restriction policy that asks all relevant industrial power users to fully suspend production, which affects the province’s output of multi-Si polysilicon. Simultaneously, the pandemic status in Xinjiang has impeded local polysilicon transportation and prolonged arrival time, and has thus aggravated the excess demand market status. There is currently an insignificant level of excessive products for sales on the market, and there had been fewer market transactions this week as it was not a period for centralized signing. Prices are still likely to rise next week as it marks the beginning of the signing period for long-term September orders, though the degree of price increment is going to be restricted considering how the downstream sector is cautious towards high-price materials.

An observation on the production and operation of the polysilicon segment this week indicates that Leshan GCL and the two Leshan plants of Yongxiang were the multi-Si polysilicon businesses that fell victim to Sichuan’s power restrictions this week, and are gradually adhering to the instruction of production suspension and reduction. Five polysilicon businesses are currently under overhaul, and one of them has steadily recovered its capacity, while the other three are expected to conclude at the end of the month. Coupling with the release of new expanded capacity, polysilicon output, despite lower than expectation, will still surpass that of July during August.

Wafers

This week’s wafer prices had leveled to that of last week, where M10 and G12 were respectively concluded at a mainstream price of RMB 7.53/pc and RMB 9.93/pc. There were no changes to the market status this week. Fewer new orders were signed this week due to the previous signing of long-term orders, which are currently being fulfilled with priority, and no apparent changes were seen in prices also. Sichuan’s power restriction mainly affects wafer businesses such as Jinko Solar and Leshan JYT. Wafer capacity is currently relatively excessive, and is able to replenish the supply void by elevating the utilization of other regions, why is why the power restriction has induced a comparatively smaller impact on the wafer segment. M10 wafers remain confined in supply, where several businesses’ acceleration on large-size capacity and release of new capacity have resulted in a prominent increase of M10’s capacity ratio, and a number of sporadic orders are exhibiting rising quotations.

Cells

Cell prices remained overall stable this week, where mono-Si M6, M10, and G12 cells were respectively concluded at a mainstream price of roughly RMB 1.27/W, RMB 1.29/W, and RMB 1.27/W. Cell prices had followed up with the stabilization of upstream prices this week. The power restriction in Sichuan this time has inflicted a certain extent of impact on the cell segment primarily owing to how cell leader Tongwei’s production lines are centralized in the province, and the reduction of overall operating rate in the cell segment has implicated the corresponding output. However, module houses have lowered their operating rate and procurement amidst the strong wait-and-see sentiment recently, thus no apparent fluctuations are seen from the supply and demand of cells, and prices are practically stabilized. Since power restrictions are likely to prolong the cycle of bargaining between cells and modules, the loosening of cell prices is expected to defer accordingly.

Modules

Module prices were stabilized this week, where mono-Si 166mm module was concluded at an approximate mainstream price of RMB 1.91/W, while mono-Si single-sided 182 and 210mm modules were respectively concluded at roughly RMB 1.97/W and RMB 1.99/W, and 182 and 210mm bifacial double-glass mono-Si PERC modules were respectively concluded at RMB 1.97/W and RMB 1.99/W.

The domestic end market is seeing a large number of postponing projects amidst the persisting bargaining between cells and modules, and modules are no longer able to reduce in prices under the weakening market demand, strong over-the-fence sentiment, and cost pressure. Several module houses are sitting on about a month worth of inventory, which is higher than the ordinary level. Module houses have dropped in different extents pertaining to utilization compared to that of July, and may have to reduce their inventory through price reduction should the bargaining carry on and inventory continue to ascend. Sichuan’s power restriction has imposed exceedingly minor impact to module capacity as there is no established production in Sichuan. N-type modules saw a mainstream quotation of RMB 2.15-2.2/W this week.

Auxiliary Materials

Glass prices were sturdy this week, with no significant changes to overall market transactions, where 3.2mm and 2.0mm glasses sat at a respective mainstream price of RMB 2.75/㎡ and roughly RMB 21.15/㎡. The module segment is maintaining the tendency of production reduction due to the exorbitant prices of modules and improved end demand, and is adhering to the purchase-upon-demand approach. The glass market continues to operate on the weaker end, and is unlikely to see any further reduction in prices due to a larger margin of cost pressure.

Film prices continued to drop marginally this week. Transparent EVA films, white EVA films, and POE films are currently concluding at an average transaction price of RMB 14.28/㎡, RMB 15.28/㎡, and RMB 15.53/㎡ respectively. With modules maintaining the tendency of production reduction, the demand for films has gone down, and a number of small businesses are almost at a standstill in production in the midst of ferocious competition, where first and second-tier businesses have also slightly lowered their utilization. The negotiation mentality has thus reinforced towards film prices as cell and module segments persists in bargaining, and prices are still likely to drop marginally.

 
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