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PV wafer prices begin to drop. What impact does this have on upstream polysilicon? [SMM Analysis]

iconSep 29, 2024 11:36
Source:SMM
SMM, September 29: According to SMM, as we approach the end of September, a new round of PV wafer transactions is gradually unfolding, and the results of the September back-and-forth negotiations between upstream and downstream are becoming clear...

SMM, September 29: According to SMM, as we approach the end of September, a new round of PV wafer transactions is gradually unfolding, and the results of the September back-and-forth negotiations between upstream and downstream are becoming clear... At the beginning of September, several top-tier enterprises collectively raised the price of 183N-type PV wafers to 1.15 yuan/piece, attracting widespread market attention. At that time, polysilicon sellers intended to hike prices as well, and the increased production cuts by top-tier PV wafer enterprises provided significant support to the market, leading to unprecedented bullish sentiment. However, due to a prior time window, solar cell manufacturers had relatively sufficient raw material inventory, leading to a prolonged negotiation over PV wafer prices for about half a month.

In recent days, as solar cell manufacturers gradually began purchasing, the results of this round of PV wafer price negotiations have gradually emerged. The transaction price of 183mm PV wafers has gradually fallen to 1.08 yuan/piece, and after the Hefei Photovoltaic Conference, market quotes have even started shifting towards 1.06 yuan/piece. The N-type 210R and 210 markets are relatively better, with the 210R transaction price gradually settling at 1.25 yuan/piece compared to the beginning of the month, and the 210mm remaining stable at 1.5 yuan/piece.

According to SMM, in mid-to-late September, PV wafer manufacturers generally faced significant inventory pressure, with inventory peaking at around 5 billion pieces, over 2 billion pieces for top-tier manufacturers, and over 340 million pieces for some second-tier manufacturers. Inventory pressure has become the main reason for the decline in PV wafer prices during this round of negotiations. Additionally, the shift in downstream demand towards larger sizes and the reduction in solar cell production have also contributed to the price drop.

As for the impact of this round of PV wafer price reductions on the polysilicon market, SMM believes it may not be favorable for the subsequent domestic polysilicon market. Constrained by cost limits, there is currently a strong positive correlation between polysilicon and PV wafer prices. After the drop in PV wafer prices, except for the deeply bound dual-distribution enterprises, crystal pulling manufacturers have further strengthened their resistance to high-priced polysilicon resources. Meanwhile, manufacturers like Xinte and GCL, which have lower quotes in this round, are performing relatively well in terms of shipments, with inventory at extremely low levels. In contrast, high-priced manufacturers are generally facing significant inventory pressure.

In October, domestic polysilicon production is expected to reach around 132,000 mt, while PV wafer demand is only 110,000 mt+, and combined with inventory pressure, the price outlook for polysilicon is not very optimistic. — As of Sep 27, the quoted price for N-type dense polysilicon from top-tier manufacturers was 40-44 yuan/kg, with no changes yet.

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