Polysilicon: Price Rises Despite Oversupply and Policy Tensions
Supply & Inventory: Polysilicon supply continues to increase, and thus the market currently in an inventory accumulation phase. New supply mainly comes from ramp-ups and commissioning of new projects. Although a few polysilicon companies have scheduled maintenance, overall monthly polysilicon output is still expected to reach around 130,000 tons, up by roughly 8,000 tons compared to August. Under continuous capacity expansion by leading players, market supply remains on the rise.
Demand: Trading remained cautious in the polysilicon segment this week, with transaction volumes lower than last week. Moreover, downstream customers showed weak procurement interest and strong wait-and-see sentiment.
Price Trend: Driven by the national policy against the irrational price competition, polysilicon prices have not declined even the supply is surplus for now. Instead, they show strong upward stickiness. Polysilicon producers are broadly holding firm on high prices, with the highest quotations reaching RMB 55/kg. Although actual deals remain limited, the price center continues to move upward in this segment. The market has now shifted into a policy-driven phase, with top-tier polysilicon companies not only lifting offers but also leveraging September’s hydropower cost advantage to expand output and build inventory.
Looking ahead, once the hydropower advantage fades in October, production cuts are expected to become more apparent. However, combined with market expectations of a potential government stockpiling policy, polysilicon prices are unlikely to see a downward turning point in the short term and are expected to remain firm.
Wafers: 183N and 210N Sizes' Prices Set for Increases
Supply & Inventory: Overall wafer inventory has not changed much, but structural issues are evident. Specifically, inventories are mainly concentrated in the 210R size, while 183N and 210N wafers remain at healthier levels. Although 183N wafer output continues to decline, a degree of supply-demand mismatch persists.
Demand: Demand for wafers vary by size. 183N and 210N wafers are seeing relatively balanced supply and demand, providing support for price increases. By contrast, market demand for 210R wafers is weaker, leading to oversupply and limited price support.
Price Trend: Against the backdrop of divergent supply-demand structures, wafer prices are showing differentiated upward movements. Rising polysilicon prices have given wafer producers strong support, serving as the main driver of the recent upward trend. With the supply-demand balance relatively healthy for 183N and 210N wafer sizes, leading wafer companies are expected to raise prices by about RMB 0.05/piece. For the oversupplied 210R size, prices are likely to remain unchanged. In conclusion, in the short term, wafer prices are well supported by upstream costs and the supply-demand balance in part of sizes, creating room for further increases in wafer prices despite structural oversupply.
Cells: Short-Term Prices Likely to Track Wafer Gains, Showing Upward Stickness
Supply & Demand: Current cell inventory remains relatively healthy, though supply-demand structures diverge. Specifically, the supply and demand of 183N and 210N formats sees better balanced, with demand for high-efficiency 210N cells on an improving trend, offering solid price support. Although there is some mismatch between output and demand for 183N, its cost advantage keeps it competitive. By contrast, 210R cells remain weak on the demand side.
Price Trend: Cell prices are also showing upward stickiness and have seen an intense bargaining phase. In conclusion, rising wafer prices provide a solid cost base for higher cell prices, particularly for 183N and 210N formats, which are expected to follow wafer price increases.
That said, the success of price hikes will ultimately depend on market negotiations. In the short term, cell prices are likely to remain stable overall, but the upward trend in line with wafers is clear.
Modules: Outlook for PV Modules Remains Positive and Firm with Gradual Uptrend
Rising upstream costs continue to drive up module production costs, though the market demand has yet to show a clear recovery. While most module makers have raised offers to above RMB 0.70/W, and reflected these in bidding processes, spot transactions for leading players are still hovering around RMB 0.68/W. This highlights the challenge modules face: costs of upstream segments are pushing higher, but weak market demand for modules makes it difficult to fully pass on increases.
In the short term, supported by costs, policies, and steady demand, module prices are expected to remain firm and positive with a gradual upward bias, while the likelihood of a downward correction is very low. In conclusion, September’s production schedules show a slight increase in planned module output, with no clear signs of demand weakening, providing further support for module prices.