Due to eruption of shortfall in supply of polysilicon, triggered by annual maintenance of Chinese capacities and unexpected production cut, scramble for supply has appeared on the spot market this week, further jacking up prices of multi-si wafer, which is already in strained supply. Weighed down by the pressure from upstream materials, Chinese and Taiwanese PV cell suppliers differ in price hikes, as a result of their price-negotiation leverage and divergent needs of their respective markets.
Still overshadowed by the demand and price crash in Q3 last year, most major polysilicon suppliers have arranged annual maintenance in Q3, to cope with slackening market in the wake of the June 30 deadline. Before the maintenance sets in at large scale, polysilicon inventory has remained low, as wafer demand by overseas PV-cell suppliers has stayed high, an effect of U.S.’s Section 201, plus deferred Chinese demands and limited new polysilicon capacities.
As of the third week of July, polysilicon supply remained tight, prompting some suppliers to consider price hike. The successive inauguration of capacity maintenance, which had cut market supply by 10%, triggered a round of price hike last week, due to continuing strong demands from downstream wafer suppliers. The unexpected disruption of Chinese polysilicon capacities this week is expected to reduce Chinese polysilicon output by 20-25% for at least two weeks. In order to honor supply contracts, downstream polysilicon suppliers have begun to purchase spot goods massively on domestic and overseas markets, leading to steep spot price hike, to RMB130-135/kg in China and US$16/kg abroad.
Affected by polysilicon shortfall, multi-si wafer supply has also been overstrained by demand, reinforcing suppliers to not only cut contract supply to PV-cell firms but also hike prices sharply to restrict urgent orders. As a result, prices of ultra high-efficiency multi-si wafers have shot up to RMB 5.15/pc and US$0.67/pc this week.
Caught between high wafer prices, due to overstrained supply, and declining module demand, PV cell suppliers are having a difficult time to have downstream module firms accept their price hike. Bolstered by demands from Europe and the U.S., Taiwanese PV-cell suppliers have more leverage for the price hike but in general concession from module firms will be limited, before upturn of module prices.
Mono-si PV cell suppliers have suffered price drop this week due to sluggish demands, but the effect has been alleviated by previous price cut of mono-si wafers. Despite dumping prices for some transactions, price decline of mono-si PERC PV cells has also been moderate this week, with mainstream price staying at RMB2.3-2.5/w.
With suppliers striving to defend their prices, transactions for mono-si 280W modules have been made at RMB 3-3.02/W this week but price drop may be moderated soon, due to the effect of the shortfall of multi-si modules. With domestic demands having begun to slacken, prices of China-made multi-si modules have begun to weaken slightly, with mainstream prices ranging RMB 2.83-2.87/W. Prices of third-party countries’ modules, however, have stayed high, at US$0.38/W, thanks to antidumping and countervailing duties and the effect of the Section 201.
(Analysis provided by Jason Tsai, analyst at EnergyTrend)