Silicon China, a branch of China Nonferrous Metal Industry Association, released its latest report on the price trends of polysilicon materials used in the manufacturing of PV products on August 17. This update pertains to prices in China during this week (i.e., the week of August 15). Transaction prices of monocrystalline refeeding material have been residing within RMB 300,000-310,000 per metric ton with the average rising by 0.36% from the previous week to RMB 305,300 per metric ton. Transaction prices of monocrystalline dense material have been residing within RMB 298,000-308,000 per metric with the average rising by 0.33% from the previous week to RMB 303,200 per metric ton. On the whole, domestic prices of polysilicon materials have stayed on the slightly upward trend this week. The average prices of monocrystalline refeeding material, monocrystalline dense material, and monocrystalline cauliflower material have all registered a hike of around 0.3%.
The Chinese polysilicon market has not changed noticeably from the previous week with respect to transactions. Suppliers already completed the monthly orders under the LTA framework in early August. Before a new round of negotiations for monthly orders occur in late August, transactions will mainly involve sporadic upside orders that provide small procurement quantities. Meanwhile, suppliers will be focusing on executing their LTAs. A few upside orders have been arranged this week, and their prices are within the range of RMB 305,000-310,000 per metric ton. Prices on the whole continue with their incremental climb.
Regarding Chinese polysilicon suppliers’ current situation, most of them do not have the available production capacity to fulfill upside orders. Their inventories also remain in the negative balance. Therefore, the pressure of tight supply has yet to ease in the Chinese polysilicon market. Also, the government of Sichuan Province imposed an emergency electricity rationing decree on August 15. Local industrial enterprises will have to temporarily curtail or halt their electricity consumption during the period from August 15 to 20 in order to free up some electricity supply for home use. As a result, local production sites for industrial silicon materials, polysilicon materials, and mono-Si products are expected to post considerable drops for output figure. In the case of local polysilicon production sites, the process of first winding down and then ramping up operation will cause disruptions in their output for at least 10-15 days. Compared with a drop in the demand from wafer suppliers, a drop in the supply of polysilicon will have a greater impact on the supply chain. Given the latest developments in the supply-demand dynamics, polysilicon prices are projected to keep rising in the future.
As of this week, there are 14 operating Chinese polysilicon suppliers, of which five are engaging in facility maintenance works. One of these five is gradually putting some of its production lines back to normal operation, and three others are expected to finish maintenance works by the end of August. Due to the emergency electricity rationing decree, Leshan GCL New Energy and two production sites operated by Yongxiang in Leshan have winded down or suspended operation in order to comply with the local authority’s demand to halt or cut back industrial activities. Also, China also has seen some new COVID-19 outbreaks this week, so the country’s logistics network has also experienced some disruptions. Domestic polysilicon production sites that have been slightly affected by this development are mostly located in the Xinjiang Autonomous Region. Other production sites in the country with the exception of those in Sichuan are shipping products as usual. Nevertheless, domestic polysilicon suppliers are expected to have some difficulties maintaining their schedules for product deliveries because the related issues with transportation and warehousing will eventually affect them in various degrees.
China’s polysilicon supply in August will be significantly less than originally anticipated due to Sichuan’s emergency electricity rationing decree and the latest COVID-19 outbreaks. The domestic production in August has been corrected down by 8%. Also, even though the latest disruptions in the country’s logistics network are minor, delivery time is expected to be prolonged for polysilicon shipments. Moreover, some domestic suppliers have been fully booked well into September. All in all, the undersupply situation in August has been exacerbated, and participants in the supply chain for PV products will also be experiencing delays and making scheduling adjustments in September. As for the general price trend in the Chinese polysilicon market, the slightly upward trajectory will persist in the short term.