L R AS Published on Sunday 4 November 2018 - n° 253 - Categories:China
Facilities in Western China reduce costs
The price of silicon has fallen by more than 30% since the Chinese decision at the end of May. Mono and multicrystalline wafers have fallen by 27% and 24%. The transfer of technology in favour of diamond cutting has made the wafer sector the most abundant in terms of supply.
Factories have moved to western China, where the cost of electricity is lowest, such as Xinjiang, Inner Mongolia and Sichuan. By 2019, total polycrystalline silicon capacity will increase by 60%, from 181,500 tonnes in 2018 to 295,500 tonnes in these three regions alone.
Multi-crystalline wafers are gradually being replaced by monocrystalline wafers. The latter will represent 47% of the total by the end of the year, then will reach 57% in 2019 due to the fact that silicon production is 70% monocrystalline, agreements between silicon manufacturers with large wafer manufacturers such as Zhonghuan and GCL Silicon / Longi and Yongxiang, and finally because the demand for multicrystalline is low.
To better eliminate multicrystalline wafers, the manufacturers of monocrystalline wafers have lowered their prices, putting enormous pressure on other products. The price of polycrystalline wafers has fallen below cost. It is unlikely that the price of multicrystalline wafers will fall further. Manufacturers may also move their plants to where electricity is cheapest (Inner Mongolia, Xinjiang and Yunnan). They may also switch to monocrystalline during the transfer.
Separation of ingot production from slicing activityThe companies moved silicon production but left the slicing to other regions. Specialists in slicing are beginning to appear and will try to lower their prices so that they can be used. Minimum subcontract prices are 0.395 RMB/piece for multi-crystalline and 0.34 RMB/piece for single-crystalline. The slicing is done in 2018 with machines modified to incorporate the diamond wire. From 2019 onwards, specific machines will be put into service, allowing cost reduction. Thus the division of the ingot production activity from the slicing activity will tend to be established, in order to reduce costs.
Great progress is being made in slicing: the diamond wire of less than 65 µm had a tendency to break. The new diamond wire saw from Meyer Burger reduces the wire diameter to 50 µm and may even reduce it to 40 µm in the future to increase the production of wafer pieces. As a result, the costs for cutting inserts can be further reduced.
Relocating plants to low energy cost regions is the only way to reduce costs. Manufacturers who cannot afford to finance the transfer of their production facilities to western regions or who have obsolete production tools will disappear. Monocrystalline will become dominant and will be in the majority in 2019.
PV InfoLink of 23 October
