Polysilicon
Supply Side:
Currently, the total inventory of polysilicon in the solar PV industry remains above 510,000 tons, with a slight accumulation trend. To ease the inventory pressure, upstream manufacturers have begun large-scale production cuts. In January, leading companies like Tongwei implemented significant production halts, with monthly output expected to shrink to below 85,000 tons. This adjustment has balanced the new output with downstream demand, but the large polysilico inventory still requires time to be absorbed.
Demand Side:
Downstream demand continues to weaken, with wafer manufacturers focusing on consuming their own stockpiles of polysilicon. As wafer production continues to decline, the demand for new polysilicon purchases has drastically reduced, leading to a cold market atmosphere.
Price Trend:
The market remains in a standoff, with prices under short-term pressure. Despite efforts by major polysilicon producers to stabilize the market by raising prices to above 60 RMB/kg, the market has not accepted the price hikes, and no actual transactions have occurred. Due to the ongoing drop in downstream wafer prices and weak demand, there is little upward pressure on polysilicon prices in the short term, and they are likely to remain in the low range of about 50 RMB/kg.
Wafer
Supply and Demand:
The inventory of wafers has risen to around 25 GW, maintaining an oversupply situation in the market. Due to wafer supply far exceeding demand in the market, wafer manufacturers are facing significant shipment pressure. Consequently, in the short term, the main task this month for wafer manufacturers is to digest the existing inventory. The oversupply situation forces companies to confront intense competition.
Price Trend:
Driven by high inventory and shipment pressure, wafer transaction prices have continued to decline, reaching historical lows. Prices for mainstream specifications have dropped: 183N to 1.1 RMB/piece, 210RN to 1.2 RMB/piece, and 210N to 1.4 RMB/piece, reflecting extreme market weakness.
Looking ahead, due to ongoing destocking pressure, wafer prices may continue to fall to seek support at the bottom level. However, with current polysilicon prices and production costs in mind, there is limited room for further decline in wafer prices, as they are nearing cost floors. Future wafer price trends will heavily depend on polysilicon dynamics, and further drops in polysilicon prices could lead to a collapse in wafer cost support, triggering further downward risks in the wafer segment.
Cells
Supply Side:
Cell inventory has slightly increased, and post-holiday production ramp-up has intensified rat race competition. Current solar cell inventory is maintained at a 8-9 day level, showing a slight upward trend. Despite ongoing production cuts this month to control cell output, the reduction in raw material (silver and wafers) prices has led to lower costs, driving strong expectations for post-holiday production. Once cell production capacity is released, market supply will increase, further intensifying price competition within the industry.
Demand Side:
Weak market demand, with downstream price pressure becoming more intense. The demand side remains very weak, with severe shortages in market orders for cells and insufficient market demand. Downstream module manufacturers, influenced by expectations of falling silver prices, have become more cautious in their procurement strategies, with an increasing wait-and-see attitude and strong price-cutting intentions. In the context of sluggish market demand, further price pressure on solar cells is expected.
Price Trend:
Cost collapse, with risks of a price correction post-holiday. While solar cell prices have remained relatively stable recently, the risk of a decline after the holidays is significant. The main drivers of this are prices reduction of both silver and wafers. Firstly, a sharp drop in silver futures, with locked-in prices falling to around 19,000 RMB/kg. Secondly, the continued decline in wafer prices, which reduces silicon costs. With weakened cost support, downstream price pressure, and expectations of production ramp-up, cell prices are likely to face a correction.
PV Modules
Supply and Demand:
The module market currently shows a significant divergence that it is popular in the overseas market while sluggish in the domestic market. Specifically, domestic market demand remains weak and lacks momentum, while overseas markets are more active, driven by export tax rebate policies, and have become the main force in current transactions. Supply side manufacturers are mainly focused on fulfilling already locked-in short-term orders, with production and shipment rhythms relatively stable.
Price Trend:
Spot prices show clear segmentation: leading manufacturers maintain quotes at 0.8-0.85 RMB/W, while second- and third-tier manufacturers are around 0.78 RMB/W. Despite fierce low-price competition, the recent rise in the bidding prices of domestic Huadian projects to 0.88 RMB/W has provided some support for stabilizing market price expectations.
However, looking toward late February, module prices will face significant challenges: first, the possible seasonal weakening of demand, and second, the chain reaction of cost collapse due to upstream price declines (wafers and cells). In conclusion, future price trends will depend heavily on the sustained pace of overseas orders and the actual impact of silver price fluctuations on costs.