Rising Polysilicon Price Versus Falling Solar Cell Price? SMM Insight Into The Photovoltaic Material Market

SHANGHAI, Sep 14 (SMM) –Last week, domestic polysilicon prices continued their upward trend - N-type polysilicon prices have risen to a high of 98 yuan/kg, and dense polysilicon prices have also broken through the 85 yuan /kg mark. Contrary to the increasing trend of polysilicon prices, solar cell prices did not continue to rise - instead, they experienced a counter-trend decline.

SMM points to a persistent supply-demand tension for polysilicon as a cause of its consistent price rise domestically. With silicon wafer production continuously growing, it's forecasted to reach 63GW domestically in September, pushing polysilicon consumption to an estimated 142,000 mt. Despite a surge in output from new polysilicon projects, supply slightly lags behind demand due to capacity ramp-up and sporadic equipment failures.

Moreover, polysilicon stocks persistently stay low. Paired with an increasingly pessimistic downstream sentiment, this prompts some upstream manufacturers to foresee a nearing market peak and to start a "price hike sprint" for greater profits during the "profit-taking period". Certain crystal pulling factories, due to previous shortages of polysilicon supplies, are forced to accept pricey resources, further supporting the price surge.

Conversely, for solar cells, SMM identifies the PV module sector as the main source of downward price pressure. With the advent of the third quarter, domestic PV module market competition has heightened, with companies at all levels aggressively boosting production and escalating price wars to gain market share. Currently, domestic PV module inventories have surpassed 50GW, and with PV module prices continually dropping, most second-tier and third-tier PV module enterprises are grappling with losses. Under the strain of costs and inventory, PV module firms are cutting production and reducing solar cell purchases, increasing the risk of solar cell oversupply. The ongoing pressure from PV module companies to lower solar cell prices has inevitably triggered a price decline.

For the upcoming market, SMM predicts that as downstream sentiment cools off, the inclination for price cuts may gradually ripple upwards.

Firstly, in September, the scheduled production of domestic PV modules will stop increasing, projected at about 50.3GW, a 5.2% decrease MOM, further diminishing the demand for solar cells. With the continuous decline in solar cell prices, procurement sentiment in the upstream may also chill. At the same time, due to a significant rise in scheduled production of silicon wafer and the demand for solar cells not keeping pace, there will be a considerable risk of silicon wafer overstock from September to early October, a situation often linked to price drops.

For silicon wafers, crystal pulling factories currently hold around 100,000 mt of polysilicon inventory (over half from top-tier companies). If silicon wafer prices decline, given the cooling market sentiment and the 'buy on rise, not on fall' mentality, SMM suggests silicon wafer companies have ample reason to delay polysilicon purchases. In such a scenario, coupled with the surge of new polysilicon firms, polysilicon companies could rapidly accumulate inventory, inciting a price 'collapse' — potentially pushing the entire upstream sector once again into a downswing phase.