Polysilicon prices continued to rise during the first week after Chinese New Year, with the overall mono polysilicon quotations sitting at roughly RMB 240/kg. Most of the polysilicon orders for February have now been signed, which leaves an insignificant level of excess materials on the market, and the concluded prices of sporadic orders have resulted in an increase in polysilicon prices this week. Most wafer, cell, and module businesses maintained normal production during the Chinese New Year holiday which facilitated smooth polysilicon shipments. As there was no inventory pressure due to the robust market demand, many have opted to observe the market in the first week after the holidays.
An observation on the production, operation, and shipment of the polysilicon sector indicates that participants among the 12 operating polysilicon businesses that had entered overhaul and maintenance previously have resumed production, and 1-2 businesses are expected to initiate overhaul during February, though the corresponding impact will be relatively small, and the primary increase in volume will come from the gradual release of expanded capacity. Due to excellent market demand, the production volume of polysilicon is still unable to fulfill wafer demand, and the mismatch between supply and demand will continue. Polysilicon prices are expected to exhibit a steady increase in February.
Wafer quotations had slightly risen this week, where M6 is now sitting at a mainstream concluded price of roughly RMB 5.25/pc, and M10 has somewhat elevated to approximately RMB 6.3/pc, and G12 has arrived at about RMB 8.35/pc. Leading wafer businesses had successively increased their wafer prices during the last week before Chinese New Year, which was followed by second and third-tier wafer businesses at a smaller level of concluded transactions. The compelling end demand during the first quarter of 2022 had yielded smooth downstream shipment in modules and cells, and managed to ramp up wafer demand. As a result, the overall operating rate of wafers will marginally improve between January and February 2022 as opposed to that of the period between October and December 2021. However, the comparatively tight balance between market supply and demand under restricted polysilicon supply during February may prompt another increment in wafer prices in the same month.
Cell quotations had moderately risen this week, with M6, M10, and G12 now sitting at roughly RMB 1.09/W, RMB 1.12/W, and RMB 1.13/W in respective mainstream concluded prices. Leading cell businesses had lowered their M6 prices, with M10 and G12 remaining unchanged, though the adjusted quotations were still considered as normal market prices, and did not end up altering market price trends at the end. Cell prices may continue to increase amidst constant inflation of upstream polysilicon and wafers, as well as the better-than-expected end demand during the first quarter of 2022. However, considering the degree of acceptance from module makers, together with the resurgence of bargaining between the cell sector and upstream & downstream wafer and module sectors, cell prices will remain under pressure.
Module quotations elevated sturdily this week, with a small increment seen in both M10 and G12 modules. Partial first-tier businesses had carried on production with a higher operating rate during the Chinese New Year holiday, which resulted in smoother shipment. Due to the thriving market demand at the first week after the holiday, a number of businesses have successively received new orders under a strong level of negotiation sentiment, where several sporadic orders have risen to RMB 2/W in quotations, though no actual conclusions have been seen. Mono-Si 166mm, 182mm, and 210mm modules have now arrived at approximately RMB 1.85/W, RMB 1.88/W, and RMB 1.88/W respectively in mainstream concluded prices.
As for demand, the compelling popularity from overseas markets continues, where India will start imposing a tariff of 40% and 25% for modules and cells from April 1st. The US has extended Section 201, and increased the tax exemption quota for imported PV cells from 2.5GW to 5GW. The domestic Chinese market is proposing various policies for the purpose of supporting the development of renewable energy such as PV, where multiple PV projects have now entered the tender invitation phase under booming end market demand. With various upstream sectors constantly surging in prices, module houses are unlikely to implement significant price increment after taking into account the level of acceptance from end project providers, and are expected to execute small and sturdy price increment during February.
In terms of auxiliary materials, glass prices had slightly gone up this week. Module makers had maintained operation during Chinese New Year, and the glass market had continued normal shipment. With the profitability of the PV glass segment currently sitting on the lower end, and price increment from various sectors of the industry chain, a number of glass businesses are attempting to raise their quotations, which are not largely accepted by module makers, and thus resulted in small concluded transactions. 3.2mm and 2.0mm glasses have slightly risen to roughly RMB 27/㎡ and RMB 21/㎡ in respective mainstream concluded prices this week.
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