Polysilicon
Quotations are continuously rising in the polysilicon market this week, with procurement on the product becoming difficult. The industry chain and market of photovoltaic is becoming vigorous, especially in the polysilicon sector, as most businesses have successively resumed operation after Chinese New Year, and procurement has been relatively difficult due to the overall insufficient supply of polysilicon. The volume of concluded transactions remains insignificant this week after the observational period last week, and the prices for partial sporadic orders continue to surge. Attributable to the material shortages in the mono polysilicon market, the demand for multi polysilicon remains on the climbing slope from the downstream sector, which ascends the quotations for the particular product. Pertaining to overseas markets, the prevention and control on the pandemic has decelerated the speed of logistics for imported polysilicon, as well as extended the duration of clearance, and coupling with the unresolved issues regarding the unmitigated shortages in shipping containers and the rise in cost, the overseas quotations for polysilicon will continue to rise.
An observation on the production, operation, and shipment status of the polysilicon sector indicates that the market is experiencing a YoY improvement in vitality, and the 10 operating polysilicon businesses had returned to the full load status at the end of February, though the fewer production days during February compared to January has diminished the provision of the overall polysilicon market to roughly 35K tons. Judging by the status in order signing for the market, a vast majority of polysilicon businesses have signed for orders to be delivered, and 1 first-tier business signed another long-term order this week, where most operating business have also signed for new orders. First-tier businesses have now essentially signed for orders until April. On the other hand, as individual businesses elevated production efficiency subsequent to overhaul and production resumption, the overall production volume of polysilicon will continue to escalate in March. First-tier polysilicon businesses continue to focus on polysilicon base constructions in areas such as Inner Mongolia, Yunnan, Sichuan, and Qinghai, while the expeditious amplification on the production capacity for various domestic production bases of polysilicon from the beginning of 2021 is expected to improve on the overall polysilicon supply until the end of the year.
Wafers
Quotations for mono and multi-Si wafers have risen evidently this week. Owing to the cost pressure derived from the inflation in polysilicon, leading wafer businesses have elevated the list prices of March sizably this week, which were followed by second and third-tier businesses, and the contracted differences between the quotations of first-tier businesses have actuated a comprehensive rise in the prices of mono-Si wafers. Wafer businesses are holding into a certain level of inventory from the successive polysilicon orders previously signed, and are once again exhibiting reluctance in selling after seeing the flourishing demand and rising prices of polysilicon. In terms of multi-Si wafers, there have been no apparent fluctuations in market quotations, though the average concluded prices have slightly risen from the impact of mono-Si wafers, and the rate of increase has not been sizeable.
An observation on the production, operation, and shipment status of the wafer sector indicates that a seller’s market status is gradually manifesting after Chinese New Year. A number of businesses have reflected on how their weaker ability in order obtainment has prompted the downstream sector to be unwilling to accept orders under cost pressure when negotiating with the cell sector, and have reduced the operating rate accordingly. The increase in upstream quotations has forced wafer businesses to absorb high-price polysilicon when negotiating for future orders, and leading businesses are now prioritized in the sales of wafer thinning. The overall market prices are expected to improve progressively within the next 2 weeks or afterwards owing to the tendency of wafer thinning and the adjustments on the spot prices of wafers in March.
Cells
Cell quotations have fully risen this week, and the pressure of inflation continues to transmit to the downstream sector. The risen cost of upstream wafer cost has forced cell businesses to follow on the implementation, which is particular evident among first-tier businesses, though second and third-tier businesses have commented on the relevant difficulty due to the weaker ability in order obtainment. Despite the flourishing demand, the constantly rising cost of cells has impelled downstream module makers to decelerate on the speed of procurement. Mono-Si Cells have simultaneously risen in prices this week, and partial cell products have returned to the level during early 2020. In the face of rising wafer prices, as well as the wafer thinning strategy implemented by leading upstream businesses, a number of cell business have reduced on production and operating rate this week in order to adjust and optimize their production lines.
The overseas demand for multi-Si cells had fulfilled the orders of first-tier multi-Si cell businesses, and merely partial first-tier businesses are still in the adjustment phase. A number of small businesses are planning to lower their operating rate.
Modules
Module prices have overall elevated this week, and a continuous inflation is seen in mainstream mono-Si products due to cost pressure. After a small number of module makers attempted to increase on prices last week, a substantial adjustment has appeared in the module market this week, followed by successive concluded transactions. Several module makers have commented on the significant increase in the cost of auxiliary materials in addition to the apparent rise in cells, and are forced to upward adjust on module quotations due to cost pressure, while the end purchasers are now even more conservative by taking into account the emergency of orders. An observation on the current status of the tender market of modules indicates that the bargaining period between businesses and the downstream & upstream sectors is carrying on amidst the elevating costs. A number of domestic projects are becoming rigorous on the requirements for module makers regarding clear definitions on the delivery schedule and the highest quotations, where partial projects are even stipulating regulations on the current and dimension of modules. Pertaining to overseas markets, the previously postponed and new demand continues to release, though the upstream inflation has resulted in an increase in the tender prices of several market projects, which extends the project schedule.
Glass quotations remain stabilized this week, where the prices of 3.2mm and 2.0mm glasses are sitting at RMB 42-48/㎡ and roughly RMB 32-36/㎡ respectively. The procurement demand for glass has yet to subside after Chinese New Year, though module makers are evident in suppressing prices during purchases owing to the pressure in cost, and the volume of concluded transactions has been relatively small this week as the market remains at the bargaining phase. Several glass businesses have commented that they are unable to guarantee an early initiation in production as the new production lines are impacted by multiple factors. Partial raw material prices and energy procurement costs have reduced while production efficiency continues to elevate. As the overall supply of photovoltaic glass increases rapidly, and that the module end is sustaining the impact from the severe shortages of polysilicon, a number of businesses have lowered on the operating rate, and the supply and demand of photovoltaic glass will further improve accordingly.
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