Silicon China, a branch of China Nonferrous Metal Industry Association, released its latest notice on the price trends of polysilicon materials used in the manufacturing of PV products on April 28. This update pertains to prices in China during this week (the week of April 25).
According to the notice, transaction prices of monocrystalline refeeding material have been residing in the range of RMB 252,000-260,000 per metric ton, with the average rising by 0.83% from the previous week to RMB 255,400 per metric ton. Transaction prices of monocrystalline dense material have been residing in the range of RMB 250,000-258,000 per metric ton, with the average rising by 0.96% from the previous week to RMB 253,300 per metric ton.
Trading in the Chinese polysilicon market has been fairly energetic this week. Prices of various products including monocrystalline refeeding material, monocrystalline dense material, and monocrystalline cauliflower material have all climbed up slightly by about 1% from the previous week. Since it is now near the end of April, polysilicon suppliers and their customers are now arranging the contract prices for May under the long-term agreement framework. There are also some sporadic small-quantity orders and urgent orders that have been submitted at noticeably higher prices.
The supply of polysilicon materials as a whole continues to get tighter due to four factors. First, customers in the downstream sections of the supply chain have kept raising demand and taking on new production capacity. Even though some companies that specialize in wafer slicing have recently cut production due to the impact of the latest wave of COVID-19 outbreaks, monocrystal growth and ingot production on the whole remains at the usual level. At the same time, customers in the downstream sections are putting their new production lines into operation, so they are procuring more polysilicon.
Second, the same wave of COVID-19 outbreaks is disrupting logistics in some regions, so some polysilicon suppliers that are undertaking capacity expansions have not received their new equipment as scheduled. All in all, production capacity growth has not been at the anticipated pace for polysilicon.
Third, logistical issues and other restrictions related to COVID-19 outbreaks have delayed polysilicon shipments. To avoid a sudden inventory shortage, buyers are sending one-off orders to alternative suppliers whom they do not usually arrange long-term agreements with. This increase in upside demand has been noticeable.
Lastly, the flow of imported polysilicon materials has been constricted by the effects of COVID-19 outbreaks and the facility maintenance works carried out by foreign suppliers. Currently, shipments of polysilicon materials from abroad have yet to return to the usual level. Meanwhile, domestic suppliers have not been able to keep pace with demand. This and the other above-mentioned developments have led to an undersupply situation and further pushed up prices.
As of this week, China has 13 polysilicon suppliers that are engaging in mass production and two suppliers that are engaging in facility maintenance works. Domestic polysilicon production is estimated to total around 58,000 metric tons for April, showing an increase of 6.2% from March. Suppliers that have activated new production capacity and are driving production growth include Yongxiang, GCL-Poly, and Daqo. As for some instances of production decline, they are mostly attributed to facility maintenance works and typical operation-related fluctuations.
Regarding polysilicon imports, they are estimated to have reached just 6,000 metric tons in April as foreign suppliers are also affected by facility maintenance works and COVID-19 outbreaks. On the whole, China’s polysilicon supply is estimated to have totaled around 64,000 metric tons in April. The country’s total PV wafer production capacity is estimated around 24GW in the same month. Hence, demand is marginally exceeding supply. Moreover, as mentioned above, the increase in monocrystal growing capacity has recently been outstripping the increase in wafer slicing capacity. Therefore, the gap between supply and demand may be wider than it appears. In sum, tightening supply is keeping prices on the uptrend.
Regarding the market situation in May, polysilicon and wafer suppliers in China and other countries all have plans to further raise production. Hence, both supply and demand will grow for polysilicon materials. China’s polysilicon supply (including domestic production and foreign imports) in May is projected to total 67,000-68,000 metric tons. The country’s polysilicon demand in the same month is projected to hit 70,000-72,000 metric tons. Again, demand will exceed supply by a small margin. In the wafer section of the supply chain, the shortage caused by COVID-19 outbreaks is expected to persist. Consequently, wafer prices will likely continue their rally and again reach record-breaking highs.
Following a comprehensive study on the supply-demand dynamics of the polysilicon market and the willingness of downstream customers to accept hikes in material costs, Silicon China has concluded that prices of various types of polysilicon materials will stay on the current rising trend in the short term.