Polysilicon
Polysilicon quotations continued to rise this week, with successive conclusions seen among high price orders recently. The quotations for mono polysilicon were fluctuating between RMB 250/kg and RMB 270/kg this week, while multi polysilicon sat at RMB 110-130/kg. Raw materials such as silicon powder are expected to be confined in supply due to the impact from the power and production restrictions, with a considerable increment seen in the prices, while the risk of power and production restrictions is also present in the polysilicon market, where the amplified cost of multi polysilicon may result in partially constrained output. The midstream and downstream sectors have also recently adjusted their prices to reflect the increase of cost that has formed a support for the current polysilicon quotations. On the other hand, the market quotations for the supply chain this week had crossed over the Golden Week, though the successive conclusions of partial high price orders since early October have led to the relatively large degree of increase in prices this week.
An observation on the production, operation, and shipment status of the domestic polysilicon sector indicates that an additional business among the 12 operating businesses is planning to initiate overhaul in late-October. For the two businesses that had previously entered overhaul, one of them is now gradually resuming production as scheduled, while another had postponed the resumption of operation to late-October. On the whole, the pace of production for the domestic polysilicon market remains ambiguous for the fourth quarter, and the shortages of raw materials for upstream industrial silicon may continue due to the incessant release of pressure from power and production restrictions under the continuous ramifications yielded by the Dual Control Policy. Simultaneously, production regions of polysilicon, such as Xinjiang, Inner Mongolia, and Sichuan, are prone to risks of reduced production, and the constrained provision may aggravate the periodic short supply status of polysilicon.
Wafers
Wafer quotations continued to ascend and transmit cost to the downstream sector this week. The cost level of the wafer sector has recently risen by RMB 0.06-0.07/pc owing to the upstream polysilicon quotations, where several first-tier wafer businesses are increasing their quotations successively to respond to the obstinately high cost of raw materials. G1 and M6 mono-Si wafers had respectively elevated to RMB 5.53/pc and RMB 5.73/pc this week, while M10 and G12 wafers are now sitting at RMB 6.87/pc and RMB 9.1/pc. The apparent inflation tendency in the market subsequent to the holiday has induced panic and resignation for the end market, which is forced to constantly release signals of production suspension that has resulted in gradually depleting concluded orders for the cell and module sectors, followed by a declining trend in the overall transaction volume of wafers, with a number of businesses already lowering the operating rate for their production lines.
The impact from power restrictions and the rising cost of raw materials have prompted the downstream sector to strongly adhere to a wait-and-see attitude, and resulted in a marginal increase in wafer prices for the bargaining, as well as induced multiple multi-Si wafer businesses to reduce production as a corresponding response. Domestic and overseas multi-Si wafer prices have now arrived at RMB 2.4/pc and US$0.329/pc this week.
Cells
Cell quotations had slightly risen this week. Factors such as the power restrictions in the country and the continuously ascending upstream cost have forced a partial number of first-tier businesses to upward adjust their October quotations, though the actual volume of concluded orders remains relatively low, with a stronger sentiment of reluctance in the market. The average market price for mono-Si M6, M10, and G12 is currently at RMB 1.12/W, with multi-Si and mono-Si G1 cells respectively sitting at RMB 0.9/W and roughly RMB 1.16/W.
An inflation is seen throughout the entire industry chain recently, where the module sector is now almost out of profitability, and the procurement demand for the cell market has decelerated accordingly. A significant number of cell businesses continued to implement holidays and production reduction in early October, and the operating rate of the cell market has essentially fallen to the previous lower level. Some cell businesses have commented that the operating rate of the cell sector may further deplete this month due to the sluggish stocking attitude from the downstream sector.
Modules
Module quotations had marginally increased this week, though a number of businesses have temporarily suspended external quotations. The continuous increment in upstream quotations has led to an incessantly confined provision of auxiliary materials such as plastic films and backplanes, which impedes the order delivery for the module market, and once again ascends production cost. G1 and M6 modules have now risen to RMB 1.9/W and RMB 2.05/W respectively, while M10 and G12 modules have elevated to RMB 2.11/W.
The module quotations in the current market have yet to be accepted by the end sector, though module makers have cut down their operating rate by a sizable margin in order to ensure the effectiveness of the high cost product. Some makers have reflected the current module cost to be above RMB 1.8/W, with most module quotations sitting at above RMB 2/W, though the actual level of profitability remains comparatively small. Pertaining to policy, China has been releasing aggressive signals regarding the upward adjustments of electricity transactions, which hopes to invigorate end demand, improve on the cell sector especially with the degree of acceptance for industrial distributed projects on the inflation of modules, as well as increase the cost of power utilization for the high energy consumption segment of the PV supply chain.
Glass prices remained predominantly stable this week, with slight fluctuations seen in a partial number of quotations. 3.2mm and 2.0mm glasses are now sitting at RMB 26-29/㎡ and RMB 20-23/㎡ respectively. The drastic reduction of operating rate in the module sector has somewhat affected the shipment volume of glass, where a small segment of second and third-tier businesses have compromised on quotations in order to stabilize their orders.
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