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Polysilicon Prices Stabilize and Stop Declining and Industry Faces Production Cuts in June

published: 2024-05-30 17:31

Polysilicon prices stop declining throughout the week. The mainstream concluded price for mono recharge polysilicon is RMB 34/KG, while mono dense polysilicon is priced at RMB 32/KG and N-type polysilicon is currently priced at RMB 38/KG.

In the realm of trading activities, transactions in the polysilicon market are limited, with most orders being small and sporadic. Currently, the price of polysilicon is below the cash cost for manufacturers, and inventories are high. As a result, both polysilicon and ingot manufacturers are reluctant to engage in transactions, focusing instead on reducing their inventory. The polysilicon inventory has remained unchanged from last month, hovering around 240,000 to 260,000 tons, indicating the difficulty in depleting stocks. Many polysilicon manufacturers have planned maintenance activities, leading to a slight decline in production in May. Looking ahead, production in June is expected to fall to 140,000 to 160,000 tons, a decrease of approximately 16.7% from the previous month. However, the significant reduction in production by ingot manufacturers has had limited impact on improving the supply and demand balance for polysilicon.

Regarding policies, the introduction of the Carbon Reduction and Energy Saving Action Plans for 2024 and 2025 has tightened the conditions for expanding and upgrading polysilicon capacity, as well as the approval conditions for new projects. This will accelerate the phase-out of older capacities, signaling a potential bottoming out of polysilicon prices. Nevertheless, the issue of oversupply persists, posing a risk of continued inventory accumulation and price fluctuations during the consolidation phase.

The prices of wafer have still reduced throughout the week. The mainstream concluded price for M10 P-type wafer is RMB 1.20/Pc, while G12 P-type wafer is priced at RMB 1.80/Pc. The mainstream concluded price for M10 N-type wafer is RMB 1.20/Pc and G12 N-type is RMB 1.70/Pc. The mainstream concluded price for N-type G12R wafers is RMB 1.45/Pc.

It is quite difficult for wafer manufacturers to reduce their inventory, which currently stands at around 5 to 5.1 billion pieces, unchanged from last week. With production shrinking in both the wafer and cell sectors, rapid inventory reduction is unlikely. In May, the utilization rate in the wafer sector gradually declined, though overall production remained high. Looking ahead to June, wafer manufacturers are facing significant losses, prompting midstream sectors to drastically cut production. Utilization rates may drop to around 50%, with some lower-tier manufacturers planning to suspend production altogether. We expect total wafer production to fall to 50-52 GW. At this stage, the pricing strategy of leading manufacturers will be crucial in maintaining stable wafer prices.

As for future pricing, wafer prices have stopped declining and remained stable this week. Despite the current low prices, all manufacturers are suffering. Wafer prices are expected to stay at the bottom during the consolidation phase until capacity is phased out.

Cell prices stop going down this week. The mainstream concluded price for M10 cell is RMB 0.300/W, while G12 cell is priced at RMB 0.320/W. The price of M10 mono TOPCon cell is RMB 0.30/W, while that of G12 mono TOPCon cell is RMB 0.35/W.

The cell inventory remains unchanged from last week, hovering around 2.3 to 2.5 billion pieces. Due to declining demand from module manufacturers, cell manufacturers have reduced their production to stabilize inventory levels. In terms of planned production, integrated bases in Southeast Asia are scaling back their output due to the end of the tariff exemption on bifacial modules and the USITC’s anti-dumping investigation on cells produced in the region. Additionally, domestic specialized cell manufacturers have reduced their production by 20% to 30% in response to weaker demand from the module sector. Looking ahead to June, cell production is expected to decline to 54-56 GW.

This week, cell prices have remained stable, but a further decline is likely. The price of N-type M10 cells is expected to fall below 0.30 yuan/W.

Module prices have maintained stable throughout the week. The mainstream concluded price for 182mm facial mono PERC module is RMB 0.80/W, 210mm facial mono PERC module is priced at RMB 0.82/W, 182mm bifacial glass PERC module at RMB 0.82/W, and 210mm bifacial glass PERC module at RMB 0.84/W. The mainstream concluded price for 182mm bifacial TOPCon modules is RMB 0.86/W, and 210mm bifacial HJT modules at RMB 1.00/W.

The planned production in the module sector is expected to decline to around 49-51 GW. Orders from leading manufacturers are not promising, and some modules produced in Southeast Asia are being reshored, leading to a slow increase in module inventory. On the demand side, there has been a surge in policies related to power reform, which will further promote transactions in renewable energy. In overseas markets, demand in Europe remains strong, with a steady increase driven by high acceptance of high-efficiency N-type modules. In the Middle East, local demand is positive, and our module export volume to the region has increased compared to last year. The Brazilian market is also seeing steady growth in demand. Regarding prices, some manufacturers might offer discounts to move reshored modules, which could impact prices in the short term. Overall, module prices are expected to remain at low levels.

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