Polysilicon
Polysilicon quotations remained stable on the weaker end this week, with surging pressure in transaction conclusion. Most major businesses have started to negotiate for new orders of December, and the constant signal surrounding price reduction from the downstream sector has yielded pressure for the polysilicon sector, where partial businesses have begun exhibiting signs of loosening in order quotations for their regular clients. The downstream sector carries on with the reduction of inventory, and is now more apparent in adhering to a wait-and-see attitude. This week saw a smaller level of concluded polysilicon transactions. A number of first-tier polysilicon businesses are unwilling to adjust their quotations over supply and demand concerns, and have yet to experience any inventory pressure. With no significant fluctuations in overall polysilicon prices, mono polysilicon is sitting at an average price of RMB 271/KG. Overseas polysilicon prices continue to be robust at roughly US$37/KG due to stabilized polysilicon quotations in China and the marginally fluctuating exchange rate.
An observation on the production, operation, and shipment status of the domestic polysilicon sector indicates that the twelve operating polysilicon businesses produced an identical volume in October and November at a total of 84K tons due to the previous Dual Control policy and the ordinary overhaul of businesses. The output of polysilicon is expected to see a MoM increase in December alongside the gradually magnifying capacity from Sichuan and Jiangsu, as well as the higher utilization rate adopted by operating businesses. The scale of downstream capacity remains relatively insufficient for the polysilicon sector, though the pressure of price reduction has been transmitted to the polysilicon market, and the demand for inventory replenishment has yet to fully manifest for each segment of the downstream sector. Polysilicon prices are projected to slightly deplete after bargaining.
Wafers
Wafer quotations had drastically deteriorated this week, with an apparent reduction in the quotations of M6 and M10. Leading wafer businesses have recently announced their latest wafer quotations, which denote a decrement in mono-Si wafers of various variations. G1, M6, and G12 have dropped to RMB 5.1/pc, RMB 5.3/pc, and RMB 8.9/pc in respective average price. Mono-Si M10 wafers have exhibited the most significant degree of reduction with the market quotation interval now lowered to RMB 6.1-6.25/pc primarily owing to the recently amplified supply of the particular product in the market, yet the decelerated pace of downstream procurement has led to fewer wafer shipment, which resulted in constantly rising inventory and exacerbating shipment pressure. It will be a while before wafer quotations stabilize.
An observation on the production, operation, and shipment status of the domestic wafer sector indicates that the seesaw bargaining continues for the end sector in the fourth quarter, and downstream purchases remain reluctant. The spontaneous price reduction of wafer inventory facilitates profitability for the downstream sector and wafer purchases on one hand, and continues to transmit pressure in price reduction towards the polysilicon sector, which lowers the level of profitability for third-party wafer foundries, on the other. In terms of production scheduling, first-tier businesses continue to thin down the thickness of wafers to 165μm, while integrated businesses have marginally lowered their utilization rate. First-tier businesses are holding onto a comparatively lower utilization rate, with various degree of reduction seen from other businesses.
Cells
Cell quotations had loosened this week, where the price reduction of mono-Si products was more evident. The stronger wait-and-see market sentiment has obstructed cell shipment, and cell quotations are unable to stabilize under the loosening prices from upstream industry chain. As a result, cell quotations continued to drop this week, where G1 and M6 cells had lowered to RMB 1.15/W and RMB 1.06/W in mainstream price this week, while M10 and G12 are now sitting at a mainstream price of RMB 1.12/W. Cell quotations remain ambiguous under the abrupt price reduction of wafers, and the overall operating rate of the cell sector is far below the level of past years owing to accumulated downstream inventory that has led to an insufficient degree of purchase intensity. Cell businesses are currently unable to forfeit larger profit.
Multi-Si wafers are experiencing an average level of demand and shipment, and are unable to stabilize in quotations should the upstream multi-Si wafer quotations continue to fluctuate. Multi-Si wafers have now dropped to RMB 0.85/W and US$0.119/W in mainstream price for the domestic and overseas markets.
Modules
Module quotations continued to loosen this week, with an apparent reduction in large-sized module products. A few second and third-tier module makers have implemented a certain extent of adjustments to the spot prices of modules due to the recent reduction seen from the prices of wafers and cells in the upstream sector, however, the downstream end sector is still anticipating further price decrement, and is upholding a much stronger wait-and-see attitude towards the module market, which actuated 166mm, 182mm, and 210mm modules to drop to RMB 1.95/W, RMB 1.96/W, and RMB 1.98/W in respective mainstream price.
The demand for mono-Si modules remains on a certain level for the overall market, where partial first-tier makers are enjoying smooth shipment thanks to centralized orders. Installation demand is now thriving in overseas market, including India, US, and Brazil, and the mitigated fluctuation of module prices are expected to expedite the reduction of inventory for the module market.
Glass quotations remained sturdy this week, with no apparent changes to mainstream market quotations. Glass businesses are slightly pressurized in shipment due to the worse-than-expected demand in the module market that started from the fourth quarter. The relatively robust prices of soda ash and natural gas are stabilizing PV glass prices on the weaker end. 3.2mm and 2.0mm glasses are currently sitting at RMB 26-28/㎡ and RMB 19-23/㎡ respectively.
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