L R AS Published on Monday 13 September 2021 - n° 373 - Categories:the prices, silicon mono/multi
Silicon (and therefore panel) prices could fall from October
Silicon would have benefited from the long gestation period of production plants
According to PV InfoLink, the reason for the rise in silicon prices is the longer construction time for furnaces, compared to the faster commissioning of wafer, cell or panel production plants.
In recent half-years, these PV producers have made significant capacity increases. This lag in plant start-up has led to significant increases in silicon prices. According to Daqo, selling prices for silicon have risen from $7 last year to $20.8 in the second quarter of 2021, reaching $26-28 in July and August.
Daqo's results are stellar
On the other hand, its production costs rose from $4.87 in Q2 2020 to $5.41 in 2021, which could be attributed to higher electricity prices and the shortage of industrial silicon
As a result, Daqo's gross margin jumped from 17% in H2 2020 to 68.7% in Q2 2021. Daqo expects high prices to persist until the end of the year and production costs to increase by 1%, due to higher raw material prices. As a result, the gross margin in the third quarter will increase significantly again.
Daqo in the second quarter of 2021 produced and sold 21,000 tonnes. With prices and sales volume rising together, the operating profit rate and net profit rate reached 66.3% and 55%, considerable increases from 8.1% and 1.8% last year, respectively.
The resumption of cell and panel purchases during the summer has boosted silicon prices. As the panel price approached the ceiling price of 1.8 RMB/W, the increase in silicon price was moderate
Possible price decrease from October 2021
After October, prices in all sectors are expected to start falling, according to PV InfoLink, as stocks start to swell.
The price increase has prompted all producers to increase their production capacity, especially outside Xinjiang, to protect themselves against possible US retaliation. Silicon production capacity is expected to increase from 180,000 to 220,000 tonnes in 2022, according to Daqo. This volume will allow 240-250 GW of panels to be produced next year, exceeding the 200-210 GW of expected demand. The oversupply will lead to lower silicon prices.
Silicon abundance in 2022 and 2023
Phase 4B of Daqo's capacity expansion will be commissioned in 2022 adding 40,000 to 50,000 tonnes and bringing Daqo's total capacity to 123,000 to 130,000 tonnes. It will then be increased to 270,000 tonnes in 2024.
Other manufacturers (Tongwei, TBEA) or new entrants (Lihao, Baofeng Energy) have planned large capacity extensions. If everything is put into operation, Chinese production capacity will reach 2 million tonnes, enabling 700 GW of panels to be produced. A new price war is possible.
https://www.infolink-group.com/en/solar/analysis-trends
PV InfoLink of 3 September 2021
Editor's note: PV InfoLink remains too focused on the silicon situation and does not put it into the context of the manufacturers. When panel producers increase their turnover by 80% in the 2nd quarter or1st half of 2021, with a 25% increase in price, there has been a change in volume of around 55%, we cannot speak of a shortage of silicon but of a distribution of silicon "according to friends". So much so that the Taiwanese research company Digitimes reports that some customers have been excluded from silicon and wafer deliveries. It obtained this information from Chinese industry circles.
