Silicon China, a branch of China Nonferrous Metal Industry Association, released its latest report on the price trends of polysilicon materials used in the manufacturing of PV products on June 22. This update pertains to prices in China during this week (i.e. the week of June 20). Transaction prices of monocrystalline refeeding material are residing within RMB 268,000-280,000 per metric ton, with the average arriving at RMB 273,100 per metric ton and showing an increase of 1.71% from the previous week. Transaction prices of monocrystalline dense materials are residing within RMB 266,000-278,000 per metric ton, with the average arriving at RMB 270,400 per metric ton and showing an increase of 1.62% from the previous week.
Prices continue to climb in the Chinese polysilicon market this week, and the magnitude of the weekly increase has widened slightly. The average transaction prices of monocrystalline refeeding material, monocrystalline dense material, and monocrystalline cauliflower material have all registered an increase of around 1.6%. Polysilicon suppliers on the whole are expediting their existing orders this week, only a few of them have accepted urgent or upside orders that involve a small procurement quality. Furthermore, transaction prices have varied across a wide range, from RMB 270,000 to 280,000 per metric tons.
The price uptrend has gotten a bit sharper this week. Currently, the top four domestic suppliers in the Chinese market are either fully booked or overbooked. This situation will persist at least to the first half or even the middle of July, so there is a very limited capacity for receiving and processing additional orders. Prices keep rising as supply remains tight. Moreover, a few domestic suppliers have had to suspend some of their production lines because of energy usage restrictions and other unforeseen events. This means that domestic production as a whole is now lower than originally estimated.
In the short term, the temporary scale-back in output is generating a significant amount of urgent and upside orders. As a result of this, the undersupply situation in the Chinese polysilicon market has worsened this week and thereby pushed up prices further. As of this week, one domestic supplier has cut production due to energy usage restrictions, while another one has suspended production. The amount of output that has been affected comes to around 3,500 metric tons, and China’s production for June is now expected to register a MoM decrease of about 5%.
Three major Chinese suppliers—Xinjiang GCL New Energy Material, Xinjiang Daqo New Energy, and East Hope—plan to undertake facility maintenance in July. Even though other Chinese suppliers (e.g., Leshan GCL New Energy Technology, Xinte Energy, and Tongwei) will be releasing new production capacity in the same month, their contribution to the overall domestic supply will be limited. China’s polysilicon production for July is now forecasted to be roughly on par with the figure for June. This is actually lower than the previous projection. On the demand side of the Chinese polysilicon market, the first three quarters saw continuing growth. Meanwhile, some suppliers have decided to expand their facility maintenance plans. With the supply-demand dynamics already in the state of imbalance, the additional facility maintenance work will exacerbate the undersupply situation in the short term.
With regard to the price trend, those suppliers that have expanded their facility maintenance plans and suspended some of their production lines will not be able to carry out their LTAs as scheduled. Therefore, the number of urgent and upside orders will rise, and the price upswing will continue on account of the market sentiment. Based on the available supply and demand data, China Silicon now believes that the undersupply situation in the domestic market will last a bit longer than originally anticipated.