The inflation of polysilicon had slightly mitigated this week, where the downstream sector has been focused on testing market signals, and multiple SME businesses are attempting to boycott the continuous inflation of polysilicon by urging the polysilicon sector to emphasize on the sustainable development of the entire industry, which is not susceptible by the particular segment. Several polysilicon businesses have commented that the current prices have been derived from market behaviors, and all participants in the industry should follow the market discipline. Despite persistently constrained supply in polysilicon, the bargaining between wafers and cells had happened during the expo, and the cell sector hopes to force the upstream sector to reduce the prices by implementing an extensive suspension, which has impacted the enthusiastic procurement of polysilicon for the wafer sector. Most polysilicon businesses had completed signing for the orders of June this week, with the lead time for partial orders scheduled to August.
Four polysilicon businesses have been implementing overhauls as of this week, including two from Inner Mongolia and two from Xinjiang, and the respective output is expected to recover between the end of June and July, where a number of multi polysilicon businesses have postponed their overhauls due to the short supply of polysilicon right now. The production volume of polysilicon in June will remain constant to that of last month. The wafer sector has become somewhat cautious in the purchases of polysilicon, especially with how the bargaining between wafers and cells is happening right now. Polysilicon prices are estimated to be sturdy in June, and will not ascend easily.
Wafer quotations had slightly fluctuated this week, with fewer concluded orders on the whole. The inflation of mono-S wafers has slowed down due to the apparent decrease in purchase willingness exhibited during the expo and the gradually rising pressure from the downstream sector. Although cell businesses are planning to converge on reducing production in order to suppress the prices of wafers and polysilicon, wafer prices should be able to remain on a high price level due to the low inventory level of wafer businesses and the general belief on the lack of synergy between cell businesses. The reduction of operating rate and the duration of reduction for cell businesses remains to be seen from the subsequent bargaining between wafer and cell sectors.
Multi-Si wafers have been extremely scarce due to the fewer multi-Si resources in the market and the recent shortages in polysilicon resources, and are now equipped with inflation dynamics under constantly rising polysilicon prices.
Cell quotations remained sturdy on the weaker end this week amidst the apparent bargaining phase. Companies from various segments commented on their respective difficulties at the expo, where some module makers expressed on the suspension of cell procurement that will happen recently under no urgency from end projects, and commented that they will no longer accept the inflation from the upstream sector. The cell sector is gradually impeded when transferring the relevant costs. First-tier businesses that are centralized in orders commented that they may follow the continuous rising upstream prices due to the partial demand from the overseas markets, which derives differentiation in the cell market. The module end is possessing a relatively high level of inventory, and is not too optimistic in terms of the operating rate, where the obstinately high wafer prices are obstructing the procurement plans of module makers. Cell prices are expected to remain robust in early June, but an increase in the cell inventory will start to loosen the prices.
Module quotations continued to fluctuate this week, and differences are starting to emerge among quotations. Partial module makers are still rushing to ship out products at the moment, and the mono-Si 360-664W module was announced at more than RMB 1.8/W this week, where the quotations for a number of bifacial 520-655W modules have exceeded RMB 2/W, in order to constantly transfer the cost pressure generated by the inflation of upstream materials. However, end project providers are still reluctant in accepting such high prices, and the overall shipment of modules has decelerated significantly.
An observation on the overseas module markets indicates that the pandemic status in India is still affecting end installations by a great extent, and resulted in sluggish sales for module makers. The end demand is relatively better in the European market, though the prominent logistics issues, including the reduction in courses and the exorbitant shipping cost, are postponing the delivery of goods. Overseas clients emphasize on the fulfillment of orders, and legal proceedings may arise in the second half of the year under constant inflation of modules and violation of contracts.
Glass quotations remained stable on the vulnerable end this week, and the shipment has been slightly impeded due to the incessant decrease in the operating rate of the module market. A number of glass businesses have delayed on the announcement of new list prices for June by adhering to a wait-and-see attitude towards the market.