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 July 27. This update pertains to prices in China during this week (i.e., the week of July 25).
Transaction prices of monocrystalline refeeding material have been residing within RMB 288,000-310,000 per metric ton, with the average holding steady from the previous week at RMB 297,600 per metric ton. Transaction prices of monocrystalline dense material have been residing within RMB 286,000-308,000 per metric ton, with the average holding steady from the previous week at RMB 295,500 per metric ton.
Polysilicon prices in China have remained constant this week mainly because the monthly orders under the LTA framework were mostly finalized in the first week of July. It is worth noting that some these orders cover the quantity for the first half of August as well. A small amount of upside orders were arranged during the second and third weeks of July. Now, in the final week of July, there have been no transactions because there is little to no available production capacity left for upside demand. This has led to the stabilization of prices. It must be emphasized that the lack of transactions is the main reason behind the flattening price trend. There has been no reversal of the current excess demand situation. In fact, China’s polysilicon production has dropped for the first time this year in July, so demand will further outstrip supply.
For LTAs, polysilicon suppliers and their customers tend to arrange the orders for the next month at the end of the current month or the start of the next month. However, so far there have been no reports of August orders being completed. The reason is that some Tier-1 suppliers had earlier set to conduct facility maintenance in July. As a result, there had been requests for buyers to overbook so as to prop up the capacity utilization rate. Hence, the orders that were arranged for July included the quantity for the early part of August (or even the first half of August). Due to the overbooking situation, the next round of orders has been slightly pushed back.
As of this week, there are three Chinese polysilicon suppliers affected by maintenance activities. One of them will be able to resume operation for some of its production lines by the end of July. The other two are expected to fully finish facility maintenance in August and September respectively.
China’s polysilicon production in July came to 58,500 metric tons, which is more or less aligned with China Silicon’s earlier projection. Compared with June, China’s production in July showed a decline of 5%. The monthly total production of the top four domestic suppliers came to 48,700 tons, accounting for 83.2% of the domestic monthly total production. The domestic suppliers that contributed to the drop in production included Xinjiang GCL, Daqao, East Hope, Youser, Bayannur Concentrator Silicon, and Sino-Si. The reduction in their production reached 6,772 metric tons. The domestic suppliers that posted a month-to-month increase in production include Yongxiang, Baotou Xinte, and Asia Silicon. The growth in their production amounted to 3,670 metric tons.
Looking ahead to August, some Chinese suppliers will have finished with their scheduled facility maintenance and resume normal operation. Therefore, China’s monthly production will be higher than originally expected. The domestic suppliers that will be driving production growth include Xinjiang GCL, Leshan GCL New Energy Technology, Baotou Xinte, Inner Mongolia Tongwei High-Purity Crystalline Silicon (Phase 2 Expansion), Qinghai Lihao Semiconductor Material, and Inner Mongolia Dongli. Xinjiang GCL and East Hope will have production lines returning to normal operation following facility maintenance, while the other suppliers will be releasing new production capacity. The increase in their production is projected to reach around 11,000 metric tons. On the other hand, one to two more suppliers will conduct facility maintenance in August. The resulting reduction is estimated around 2,600 metric tons.
Taken altogether, China’s polysilicon production in August is projected to register a month-to-month growth of around 13%. Hence, the tight supply situation is expected to ease a bit. Negotiations for August orders under the LTA framework will commence next week. China Silicon expects domestic polysilicon prices to stay relatively stable during that time.