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In July, the production of modules improve month-on-month, and TOPCon industry chain is flexible enough

published: 2023-07-03 18:25

Polysilicon: The price of polysilicon has experienced a rapid decline in recent weeks, with the mainstream price dropping to around 64,000 yuan per ton this week, representing a 5.9% decrease in just one week. This decrease has significantly narrowed the price gap between the mainstream and other prices. The overall price level has reached its bottom, and in some cases, prices have fallen below the bottom line for certain companies. High-quality categories such as dense material and re-feeding material have witnessed significant improvements in sales, leading to a notable reduction in inventory. However, there is still a total of 6 to 7 million tons of spot inventory in the industry, necessitating adjustments in inventory distribution.

Silicon Wafers: In May, the profitability of wafer per watt experienced a significant decline due to high wafer inventory, resulting in a prolonged period of low profitability. However, in June, wafer companies started reducing their excess inventory, leading to a decrease in current inventory levels and stabilization of wafer profitability per watt. Nevertheless, with the increase in new production capacity over the past two months and an anticipated 20% month-on-month increase in wafer production by leading companies in July, substantial growth in wafer profitability is unlikely. The current estimated wafer profit per watt stands at around 0.04 yuan, with a relative equipment payback period of approximately five years. As a result, second and third-tier manufacturers may reduce their investment enthusiasm, emphasizing the need to monitor the industry's production expansion.

Cells: The profitability of PERC cells per watt has experienced a slight decline due to a recent rapid decrease in industry chain prices, causing customers to temporarily halt purchases. However, with an expected improvement of 5%-10% in module production for July, the profitability of selling cells is anticipated to stabilize. Particularly, there is a shortage of supply in TOPCon cells, leading to greater flexibility and profitability. The demand for TOPCon cells, especially N-type cells, has exceeded expectations, accounting for 40% to 50% of total domestic bidding demand. Additionally, orders for TOPCon cells from overseas customers have significantly increased. However, some supply-side enterprises are facing lower production capacity than anticipated. Moreover, TOPCon cells require screen mesh in 2 to 4 processes compared to PERC cells, which require it in only one process. This results in a shortage of high screen mesh supply. First-tier manufacturers, with their strong ability to maintain screen mesh supply, are expected to demonstrate advantages in efficiency and cost compared to second and third-tier manufacturers.

Modules: The decline rate of silicon prices has notably improved this week. Furthermore, the pent-up demand for modules is anticipated to be released, with top module enterprises expected to increase production by 5% to 10%. The downstream power station IRR (internal rate of return) has significantly improved with the current module price, and substantial industry demand for modules is expected to be released on a large scale in Q3. TOPCon modules demonstrate high cost-performance, with 72-piece modules of the 182 version offering 25-30W more power compared to PERC modules. JinkoSolar, in particular, possesses advantages in power compared to other companies. Leading module companies in the TOPCon segment are expected to exhibit strong competitiveness in securing orders, surpassing shipment volume and market share expectations.

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