With China's downstream demand beginning to weaken this week, capacity utilization rate of first-tier module firms has remained relatively high, thanks to delivery of remaining orders for PV projects yet to be installed after the June 30 deadline and more concentrated overseas demands. Prices, however, have begun to shake, overshadowing price performance in the upstream sector, although overseas demands remain strong, driving up prices further.
Polysilicon prices have begun to rise this week, thanks to continuing demand from downstream wafer and reduced supply, caused by annual maintenance of major polysilicon firms. Prices on the mainland Chinese market stand at RMB 121-126/kg this week, which are expected to be even higher next week, with ceiling targeted at RMB 128-130/kg.
With mainland China's downstream demand in August remaining uncertain, multi-si wafer prices have remained flat this week, while supply of multi-si wafers in other markets has continued to be overstrained by demand, with orders having been extended to the second half of August. Overseas quotes for ultra high-efficiency multi-si wafers have risen further to US$0.66-0.7/pc.
Prices of mono-si wafers have remained flat, in the range of 0.787-0.83/pc, this week. Overstrained supply of Taiwanese mono-si wafer plants has been alleviated, thanks to the gradual initiation of new capacities and declining demand in mainland China. Prices will be even higher in the next two weeks, given certainty for further price hike for polysilicon and strong overseas downstream demand.
Situation of PV cell has remained virtually unchanged this week. With downstream major suppliers still having ample overseas orders in hand, spot prices have been kept, while prices of non China-made PV cells have continued to rise slightly but the prices have approached the level bearable for downstream customers. In August, PV-cell suppliers will have a tough time in price negotiation, due to downward extension of price hike for upstream polysilicon and capping of downstream module prices.
Module prices and demands have diverged further, as first-tier module firms have maintained their capacity utilization rate at rather high level, thanks to concentration of overseas orders, albeit at slightly lower prices, in sharp contrast to steeper price drop of small and medium suppliers focusing on China's domestic market.
(Analysis provided by Jason Tsai, analyst at EnergyTrend.)