Polysilicon
Polysilicon quotations continued to decline this week, though the degree of acceptance remained on the lower end from the wafer sector. The recently fallen back downstream prices of polysilicon have yet to significantly impact end demand, which leads to a relatively lethargic level of market orders, where a small extent of spot procurement has descended the quotation of mono polysilicon to roughly RMB 253/kg. The mid and downstream sectors are currently more cautious towards polysilicon quotations, and some downstream businesses have reflected that another reduction of RMB 10-20/kg is required for polysilicon after considering end cost and profitability of the polysilicon sector. The unwillingness in forfeiting large profit from partial polysilicon businesses due to a small degree of inventory pressure had contributed to the apparent bargaining sentiment in the market this week.
An observation on the production, operation, and shipment status of the domestic polysilicon sector indicates that most businesses are shipping according to their negotiated long-term orders, and several businesses have experienced an increase in inventory. The downstream sector remains on the digesting phase for overall polysilicon inventory, and partial businesses are attempting to feel out the demand intensity of the wafer market, as well as hoping that orders of downstream stocking can be extended to Chinese New Year. On the other hand, the multiple methods, including price reduction, production decrement, and inventory reduction, that are adopted by the wafer market for the purpose of inhibiting prices against the polysilicon market, has somewhat increase the overall inventory of polysilicon to an interval of 1-2 weeks that is still considered as rational.
Wafers
Wafer quotations had dropped significantly this week, where partial businesses had upward adjusted their output ratio of M6 wafers. The wafer market remained on fewer concluded orders this week, with slightly chaotic quotations, and the overall price and inventory reduction of wafers continues. G1 and M6 wafers have now depleted to RMB 5.09/pc and RMB 4.9/pc in respective average price. In terms of large-sized wafers, M10 wafers has deteriorated by a great margin to RMB 5.75/pc due to ferocious wafer sales and competition that led to large accumulation of inventory for businesses, while G12 wafers has now declined to RMB 8.2/pc in average price. Multi-Si wafers have dropped by a sizeable extent to RMB 2.05/pc and US$0.285/pc in domestic and overseas prices under fluctuating industry chain prices on top of the end demand that was already sluggish.
An observation on the production, operation, and shipment status of the domestic wafer sector denotes that the wait-and-see attitude of the market remains strong prior to the stabilization of polysilicon quotations, and there are now a significant number of wafer businesses who have downward adjusted their production plans amidst the constantly rising inventory from the wafer market. Simultaneously, partial businesses have started to increase their output ratio of M6 wafers under the aggressive competition of large-sized wafers, as well as the delivery of M6 wafers during the first quarter of 2022, and the anticipation to a recovered demand. In terms of orders, two mid-scale wafer businesses have recently signed long-term orders on mono-Si wafers. Coupling with the frequent signing of long-term orders in the wafer market since the fourth quarter, it is evident that non-integrated businesses are starting to place additional emphases on the guarantee of wafer provision.
Cells
Cell quotations continued to drop this week, and no improvement was seen from the overall demand of the downstream sector. The prices for various PV segments have been dropping continuously in recent times, though the anticipated recovery in end demand has yet to appear in the market, and module makers are still implementing cell purchases according to each order by adhering to a certain degree of expectation towards a reduction from existing cell quotations, which resulted in a depletion to RMB 1.08/W, RMB 1.02/W, RMB 1.08/W, and RMB 1.05/W for the mainstream prices of mono-Si G1, M6, M10, and mono-Si G12 respectively. Multi-Si cells have further dropped to RMB 0.75/W and US$0.104/W in domestic and overseas prices due to sluggish end demand and the actuation from mono-Si prices. As for operating rate, partial second and third-tier businesses are still planning to lower their operating rate owing to the wait-and-see attitude of the downstream market.
Modules
Module prices continued to loosen this week, with mono-Si large-sized modules exhibiting the largest degree of fluctuation. Aside from partial first-tier businesses who are maintaining on stable quotations, most of the second and third-tier businesses have adjusted their quotations, and some of them have adopted the underselling strategy due to inventory pressure, with a few 500W and above single-sided modules now costing as low as RMB 1.85-1.88/W. On the whole, the market is currently seeing chaotic quotations and fewer concluded orders. 166mm modules are currently sitting at RMB 1.88/W for mainstream quotation, while 182mm modules have dropped to roughly 1.90/W in mainstream quotation, and 210mm modules have declined to approximately RMB 1.91/W in quotation. The demand for modules in 2022 is currently centralized in the Indian market and domestic projects that are successively initiated, however, the module market remains focused on the delivery of smaller and previous orders under fluctuating industry chain prices.
Regarding auxiliary materials, glass quotations had slightly decreased this week, where 3.2mm and 2.0mm glasses are now RMB 25-26/㎡ and roughly RMB 19-21/㎡ respectively. A marginal reduction was seen in the quotations of glasses this week due to the impeded shipment of modules, and the overall demand is starting to seem pessimistic, while the obstinately high natural gas prices in the second half of the year has elevated the cost pressure of PV glasses, where partial glass business are now planning to adopt direct gas supply in order to lower their cost. The backplane market remains sturdy, where the insufficient dynamics in price reduction for businesses due to the scarcity of PET and fluorine film, as well as the risen cost, may actuate backplane businesses to switch to production of products that possess a better cost-performance value. The film market remains stable in prices, with a comparatively better demand from module makers, and partial film businesses have upward adjusted their operating rate in order to accelerate the reduction of high-priced particle inventory.
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