Published on Sunday 21 May 2023 | Article n°446
Material stocks are building up in the spot market. The overall volume remains very high. This leads to lower prices.
The price of Grade 1 monograde silicon has fallen back to RMB 132-146/kg, with wide disparities between manufacturers. Tier 2 and Tier 3 producers are experiencing a sharper decline, especially as they blend it with low grade silicon. As a result, the price gap between Tier 1 and Tier 2 manufacturers is increasing
The sector maintains higher margins than the rest of the industry. Tier 2 producers are facing increased competition to increase quality, to increase production capacity, and to control costs.
The supply of chips is gradually outstripping demand as manufacturers continue to increase production. The rapid build-up of total wafer stocks is putting manufacturers under commercial pressure, resulting in a significant drop in wafer prices this week.
Prices for M10 and G12 wafers stand at RMB 4.6/piece and RMB 6.10/piece. Tier 1 manufacturers are maintaining their prices while Tier 2 and 3 manufacturers are caving in and reducing their prices to RMB 4.2 and RMB 6/piece. Manufacturers have to adapt to oversupply.
Wafer stocks continue to build up, potentially reaching 15-17 GW by the end of the month, if manufacturers maintain high utilisation rates.
Despite recent significant price declines and an upward demand outlook in the middle of the year, some manufacturers are considering reducing production due to the difficulty of reducing inventories. The impacts of adjustments in wafer production will not be felt immediately. Actual production will not show significant declines until June at the earliest.
The price of cells is falling in line with the continuing declines in wafer prices. It is now at 0.95 and 1.06 RMB/watt for M10 and G12 sizes, respectively, down 4-8%.
In overseas markets, the decline in dollar prices is more moderate as buyers adopt the locked-in exchange rate.
TOPCon cell prices are falling in line with wafer prices, reaching RMB 1.05-1.06/W. N-type cells maintain stable premiums compared to P-type cells. Despite a lower volume of transactions, HJT (G12) cells see their prices fall in line with those of M10 cells, reaching RMB 1.25/W.
Wafer price declines have not yet been passed on to the cell sector, thanks to strong demand. With the drop in wafer prices, cell prices could drop next week.
Lower upstream prices are prompting buyers to defer orders to take advantage of lower prices. Prices are between 1.60 and 1.68 RMB/W. This wait-and-see attitude is slowing down some projects. The consumption rate of panels is lower than expected.
Panels with glass backsheet are delivered at RMB 1.6-1.75/W, mainly between RMB 1.65-1.66/W. For glass-glass panels, prices are generally between RMB 1.68 and 1.69/W. The gap between the prices of the Tier 1 and other panel manufacturers remains clear, as the latter are closer to the low price range of RMB 1.6/W.
In overseas markets, panel prices are stabilising for the time being. Panel manufacturers are delivering orders at $0.2-0.22/W (FOB). In Europe, panel prices are between $0.21 and $0.215/W in April. In some channels, stocks are building up, with prices reaching $0.225-0.24/W. Chinese panel prices remain 10-20% cheaper than non-Chinese brands.
Due to lower supply chain prices and lower PERC prices, G12 HJT panels are delivered at significantly lower prices (between RMB 1.83 and 1.87/W), which is RMB 0.1/W more than TOPCon.
For TOPCon M10 panels, panel manufacturers are slowing down deliveries due to the volatility of the market in China. Prices slip to 1.7-1.79 RMB/W, mainly at 1.73-1.75 RMB/W. In overseas markets, prices fall to $0.22-0.24/W due to fluctuations in PERC panel prices in dollars.
InfoLink of 17 May 2023
As of May 16, OPIS sees a decline in wafer prices. TCL Zhonghuan has cut prices for the second time: M10 wafers are down 9.3% to $0.696 per piece (pc) and G12 wafers are down more sharply, by 16, % to $0.818/pc. The less traded M6 wafers also fell by 5.2% to $0.624/pc. G1 mono wafers remained unchanged at $0.666/pc due to limited trade in the face of declining market share.
The 15% price drop on wafers is said to be due to TCL Zhonghuan's desire to increase its market share by undermining its main rival, LONGi.
This price decline is "reasonable", according to some observers, as the price decreases are equivalent to the cumulative effect of the decline in Chinese silicon prices in China.
As a result of the continued decline in silicon prices, along with increased production, OPIS expects wafer prices to fall further in the near term and pave the way for lower downstream prices.
PV Magazine of 19 May 2023