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When Will Polysilicon And Silicon Wafer Prices Bottom?

iconJun 6, 2023 09:55
Source:SMM
Since the beginning of the second quarter, the prices of domestic silicon wafers have started "another round" of declines. The price of polysilicon, which was already on the downward channel, has dropped more rapidly under the influence of silicon wafers. According to SMM statistics, as of June 1, the average price of domestic dense polysilicon was 116.5 yuan/kg, a drop of 43.4% compared to early April. The average price of 182 mm silicon wafer was 3.9 yuan per piece, a drop of 38.7% compared to the beginning of April. The market is relatively pessimistic. When will silicon wafer and polysilicon prices bottom?

Since the beginning of the second quarter, the prices of domestic silicon wafers have started "another round" of declines. The price of polysilicon, which was already on the downward channel, has dropped more rapidly under the influence of silicon wafers. According to SMM statistics, as of June 1, the average price of domestic dense polysilicon was 116.5 yuan/kg, a drop of 43.4% compared to early April. The average price of 182 mm silicon wafer was 3.9 yuan per piece, a drop of 38.7% compared to the beginning of April. The market is relatively pessimistic. When will silicon wafer and polysilicon prices bottom?

SMM believes that for the silicon wafer market, the main reason for this round of price decline is that manufacturers continued to increase production under the influence of a substantial increase in profits, and silicon wafer inventory continued to accumulate and reached a high level. According to SMM statistics, the inventory of silicon wafers in May was as high as 1.8 billion pieces, and some first-tier manufacturers had inventory for half a month. Due to high profits of silicon wafer, solar cell plants faced great cost pressure. With downstream buyers pushing for lower prices and inventory pressure, silicon wafer plants sold off at lower prices. Some second-tier and third-tier manufacturers lowered prices and then the market price of silicon wafer immediately "collapsed". Although inventory then declined, the inventory pressure still existed. Price war emerged.

Many silicon wafer companies reduced production to ease pressure. In mid-May, a first-tier silicon wafer company shut down more than 2,000 furnaces. According to SMM statistics, the silicon wafer production schedule in June is expected to be less than 49 GW, which will be basically flat from May. At the same time, as the inventory of silicon wafers continues to decrease, the inventory pressure is expected to ease. In addition, as the price of silicon wafer continued to fall to the cost line of some manufacturers, the price drop of silicon wafer will slow down.

SMM believes that polysilicon prices may continue to fall. First, in July, it is expected that several new polysilicon production lines will be put into production in China, such as Baofeng, Hoshine, etc. The commissioning speed of new polysilicon production lines will be much faster than that in April and May. Secondly, in the first half of 2023, the price of domestic industrial silicon continued to fall, down from 23,000 yuan/mt previously to about 14,000 yuan/mt. The continuous price drop of industrial silicon significantly lowered the cost of polysilicon, and this left more room for profit.

However, it is worth noting that with the high temperature in summer and the impact of water levels in Sichuan and other regions, there will be power rationing and production cuts in the future. This, coupled with price hikes of first-tier enterprises, may lead to a brief recovery in polysilicon prices.


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