Polysilicon
The overall inflation in the polysilicon market has diminished this week, with merely a slight increase in the price of mono polysilicon that has been propelled to RMB 95-105/kg, with an average price of RMB 101/kg. Most polysilicon manufacturers had signed for the orders of September last week in succession, and large transactions remain stable. The resumption of production from overhaul businesses as the previous work incident from the polysilicon factory in Xinjiang alleviates has marginally mitigated the shortage of polysilicon.
As indicated by the information released by polysilicon businesses recently, the sluggish demand in 1H20 had resulted in a substantial reduction in polysilicon prices and the constant accumulation of inventory. The certain degree of differences in cost control for polysilicon businesses that are currently in production, and the decision from partial businesses in implementing early overhaul after taking into account the anticipated demand, have provided guarantees for the provision of polysilicon at full capacity in the current phase. A number of businesses will arrange adequate overhaul and transformation of certain production lines in order to optimize cost to RMB 45K/ton. In addition, the weakened demand exhibited from end purchases recently, and the apparent price squeeze tendency, as well as the production capacity from Xinjiang and Sichuan that is unable to temporarily return to the normal level in September, have contributed to the overall shortage of polysilicon in the short term, providing support for price negotiations of polysilicon.
Wafer
The prices of wafers are predominantly stable this week, and the pressure in the market persists under the impact from the impeded supply of polysilicon. Wafer businesses began initiating the pattern of “purchase frenzy” subsequent to the further contracted supply of upstream polysilicon, and started to sign for long-term orders successively in order to ensure product supply. Entering September, first-tier wafer businesses are signing successive orders, though the fluctuation of polysilicon prices has impacted partial businesses, which resulted in relatively scattered orders and greater span in the closing prices. The current closing prices for mono-Si wafers remain robust, where the average prices for mainstream products G1 and M6 mono-Si wafers are maintained at RMB 3/pc and RMB 3.2/pc respectively. However, the strict control on transportation due to the unrecovered pandemic status in Xinjiang will create a certain hindrance to the supply of wafers.
For the market of multi-Si wafers, the price advantages of the product has yet to substantially elevate downstream demand as a result of upstream inflation. The current mainstream closing price is at approximately RMB 1.6/pc for the multi-Si wafer market, with the average price maintained at RMB 1.55, where the closing prices for partial second and third-tier businesses have fallen on RMB 1.54-1.58/pc, and the concatenated inflation of upstream multi polysilicon has induced further pressure for multi-Si wafers, which generates greater pressure for business operation.
Cells
The cell market started to experience weakened prices this week, which led to stagnancy in transactions. An observation on the price trend for mono-Si cells this week has revealed a simultaneous reduction for both G1 and M6 mono-Si cells, and the difference in the average prices of the products has been expanded to RMB 0.02/W. However, the majority of the existing demand for domestic and overseas multi-Si cells derived from postponement of downstream end projects, together with the weakened purchase demand in cells for module makers, have prompted partial second and third-tier businesses to attempt to maintain the operating rate by obtaining orders through price reduction, thus leading to a relatively sluggish trend for the overall market status.
For the market of multi-Si cells, the minor increase in the prices of multi-Si cells disclosed by first-tier cell businesses at the end of August has created support for the prices of multi-Si cells, where the prices for multi-Si cells remain sturdy at RMB 0.53-0.6/W, with an average price of RMB 0.55/W. In addition, the official commencement for the shipment of large-scale cells (e.g. M10) in small quantity by major first-tier manufacturers, as well as the M10 quotations revealed by upstream wafer end, are expected to trigger a continuously elevating demand for large-scale cells subsequently.
Modules
Module orders have exhibited apparent differentiation this week, where mono-Si PERC modules of various power rangers have been revised upward at the same time. First-tier manufacturers have been successful in increasing the quotations of modules by echoing with the inflation of auxiliary products, especially with high-efficiency modules, where the 440W+ module that is recently scheduled for delivery before mid-October lingers at around RMB 1.60-1.75/W, which somewhat elevates the overall module quotations, and propels the >325W/>385W modules to rise to RMB 1.55-1.66/W. In terms of domestic tenders, the overall status in the provision and price negotiation from module suppliers and the project end has been improved. The concentration in successful tenders from leading businesses has been expanding continuously in the GW-grade tender project opened in around August, and the discussion on the group purchase of modules between China Huadian Corporation and China Huaneng Group concluded that the successful bidder is able to integrate actual production capacity of businesses and the grid construction of projects, while also request on the confirmation of the delivery cycle of modules, which generates a certain degree of escalation in the power of discourse for price negotiation of modules.
However, the incessantly increased module cost has started to generate difficulties in operation for second and third-tier module makers, who can only reduce the operating rate to mitigate on losses since downstream system integrators would rather defer project establishment based on the wait-and-see attitude towards the market. Pertaining to the overseas markets on the contrary, most domestic businesses have placed their resources in the domestic market due to the impact from the pandemic in 1H20, and despite the inevitably repeated pandemic status indicated by the fluctuations in the 3 major markets of India, Brazil, and the US, as well as the bounce backs of diagnosed cases in Europe and partial East Asian countries, and the restrictive measures currently implemented by governments around the world, the possibility in a large-scale outbreak from countries around the world remains relatively small, where projects of ground establishment for most markets are on the verge of entering normalization, thus the global branching of module businesses is expected to accelerate once again.
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