Polysilicon：
Polysilicon prices remain stable throughout the week. The mainstream concluded price for mono recharge polysilicon is RMB 60/KG, while mono dense polysilicon is priced at RMB 59/KG and N-type polysilicon is currently priced at RMB 64/KG.
Analyzing the current dynamics of the market reveals a decrease in polysilicon orders, with a predominantly small order scale, primarily fulfilling existing orders. Market sentiment varies for different types of polysilicon due to distinct downstream demands. P-type polysilicon orders have slowed, and in January, weakened customer demand is expected to further reduce these orders. Conversely, N-type polysilicon experiences strong demand as downstream crystal pulling manufacturers swiftly adjust their output, resulting in increased orders.
On the supply side, the new production capacity coming online this month faces challenges in maintaining stable polysilicon quality. This instability is anticipated to contribute to an excess supply of P-type polysilicon. In contrast, leading manufacturers continue to dominate the supply of high-quality N-type polysilicon. Consequently, the future output increment hinges on the structural adjustments made by these key manufacturers, as the current output from new production capacity falls short of supporting the increased supply of N-type polysilicon.
Turning to the demand side, a significant halt in the production capacity of P-type cells has impacted the upstream segment of the industrial chain. This has led to a rapid decline in crystal pulling manufacturers' demand for P-type polysilicon, causing an increasingly imbalanced supply and demand relationship. However, there remains ample demand for N-type polysilicon. Presently, polysilicon manufacturers are mainly focused on fulfilling existing orders this week, with new orders being scarce. Despite this, the polysilicon price has remained stable. Looking ahead to next week, as enterprises sign orders for January, there may be fluctuations in polysilicon prices. The prices of P-type and N-type polysilicon are expected to diverge further.
Wafer:
The prices of wafer have diverged throughout the week. The mainstream concluded price for M10 P-type wafer is RMB 2.00/Pc, while G12 P-type wafer is priced at RMB 3.00/Pc and M10 N-type is priced at RMB2.25/Pc.
Observing various wafer types, the drop in prices for P-type polysilicon has indeed boosted profits in the downstream segment. However, the lackluster demand for P-type cells has resulted in a substantial decrease in the demand for wafers. While wafer supply has been trimmed, an oversupply situation persists. Currently, the price of P-type wafers has nearly bottomed out at two yuan. Our estimates indicate that the gross margin for 182mm P-type wafers will plummet into negative double digits, signaling widespread losses in the production capacity of P-type wafers. Consequently, it is anticipated that crystal pulling manufacturers will swiftly adjust the share of P-type products to minimize losses.
On the flip side, N-type wafers continue to enjoy strong demand from downstream cell manufacturers, maintaining stability in the supply and demand dynamics. Despite a significant increase in production capacity, the substantial growth in N-type polysilicon output is still in the works. Consequently, N-type polysilicon stands as a bottleneck hindering the expansion of N-type wafer output. In the short term, it is expected that with support from both the supply and demand sides, the price of N-type wafers will remain stable. This week, the price of P-type wafers is still on a downward trend, albeit with a limited decline rate due to its cost considerations. Meanwhile, the price of N-type wafers is projected to stay steady.
Cell:
Cell prices have diverged this week, with the M10 cell price going down and other cell prices being stable. The mainstream concluded price for M10 cell is RMB 0.38/W, while G12 cell is priced at RMB 0.41/W. The price of M10 mono TOPCon cell is RMB 0.46/W.
Assessing the supply and demand dynamics across various cells, the production schedules for P-type cells are experiencing unforeseen fluctuations. Despite the associated costs, a substantial portion of P-type production capacity is slated for shutdown, with leading manufacturers planning to cease P-type cell production altogether. The P-type polysilicon production capacity, capable of being upgraded, will undergo a quicker transformation into TOPCon production capacity. Manufacturers are strategically halting N-type cell production and maintaining reasonable inventory levels. After fulfilling large-scale P-type cell orders in the first half of 2024, manufacturers intend to deplete P-type cell inventory at a reasonable price, minimizing losses.
The current price of 182mm P-type cells has dropped to below 0.38 yuan/W, indicating a market price significantly lower than the production cost. Consequently, the trade volume of P-type cells has plummeted to zero. While there remains demand for N-type cells, the purchasing demand from module manufacturers for cells is lackluster. Coupled with a reduction in wafer prices, there is insufficient support for the cost and demand of cells, resulting in a slight decline in the price of N-type cells to 0.46 yuan/W.
Module:
Module prices have remained stable throughout the week. The mainstream concluded price for 182mm facial mono PERC module is RMB 0.98/W, 210mm facial mono PERC module is priced at RMB 1.00/W, 182mm bifacial glass PERC module at RMB 1.00/W, and 210mm bifacial glass PERC module at RMB 1.01/W.
On the supply front, while some leading manufacturers are maintaining high operation rates due to overseas orders, the majority of others are strategically cutting back on their production schedules. This month, the actual output of modules has experienced a month-on-month decline, contributing to weak profitability among manufacturers. Turning to the demand side, domestic demand is currently in the off-season, and the installation rush period has concluded. Additionally, overseas major markets are depleting their inventories, resulting in sluggish demand.
In summary, the outlook for module orders this month is bleak, and the price trend is once again on a downward trajectory. Specifically, the price of mono 182mm P-type modules has dropped below one yuan, intensifying manufacturers' losses. They are now patiently awaiting signs of recovery in the first quarter of 2024.