PV Midstream and Upstream Prices Continue to Rise, Showing Signs of "Warmth"; Industry Awaits a Potential Reversal Trend

The upward trend in PV prices has begun to emerge, with silicon wafer prices rising by over 9% this week, driving up battery prices and bringing a sense of "warmth" to the industry chain. However, the main reason for the increase in silicon wafer prices is undersupply. Given the uncertainty in end-use demand, the sustainability of the price hike remains to be seen.

A representative from a top-tier silicon wafer enterprise told a reporter from CLS that the current price increase is mainly due to short-term supply and demand changes, representing a rebound from the previous excessive price drop. Whether this will lead to a reversal and establish a clear upward trend in prices still requires further observation, as market demand and capacity adjustments will take time.

He believes that the current prices do not yet indicate a substantial improvement in business performance. However, if the shortage of silicon wafers persists, there may still be room for further price rebounds.

An industry chain analyst told a CLS reporter that considering Q1 is the off-season for PV installations, prices are expected to remain largely stable after a short-term increase. According to the Silicon Industry Association, as of this week, downstream procurement enthusiasm has significantly increased, accelerating the pace of supply and inventory consumption for silicon wafers.

The price increase for monocrystalline silicon wafers further expanded this week.

In the polysilicon segment, affected by the continued decline in operating rates, polysilicon prices have been rebounding slightly since late December last year. This week, the price increase expanded, with various types of polysilicon rising by approximately 1%-2%. Statistics show that China's polysilicon production in December 2024 was 103,800 mt, down 22.10% MoM. The estimated production for January 2025 is around 98,000 mt, a MoM decrease of about 5%.

A CLS reporter noted that although prices for polysilicon and silicon wafers have risen, the increases were mainly concentrated in transactions by top-tier enterprises. The aforementioned analyst told the CLS reporter that the destocking effect in the polysilicon segment has been relatively good, with top-tier enterprises transacting at 45 yuan/kg, though trading volumes were relatively small.

According to his analysis, this price is already above the cost line for top-tier enterprises. Future price trends will depend on industry self-discipline and demand conditions.

Since Q2 last year, prices across the main segments of the industry chain have fallen below costs, leading to widespread net profit losses among producers. By late June, the industry entered a phase of cash cost losses, marking the bottom of the cycle. In December, over 30 top-tier enterprises agreed to regulate capacity through a "self-discipline" agreement. That month, major polysilicon producers such as Tongwei Co., Ltd. (600438.SH) and Daqo New Energy Corp. (688303.SH) announced phased production cuts and maintenance for some production lines.

However, compared to the price recovery in the midstream and upstream segments, prices in the module segment, which is closest to the end-user, have yet to show signs of loosening. In its latest report, Infolink noted that while module manufacturers have adjusted their quoted prices upward, the actual delivery prices continue to decline, mainly due to weak market demand.

According to its data, spot market prices have been continuously falling since late December, with clearance prices now reaching 0.4-0.5 yuan per watt, and mainstream delivery prices ranging from 0.62-0.67 yuan per watt.

However, in the centralized market, influenced by the association's "cost reference price," there has been a certain price increase recently. It is reported that most manufacturers are delivering at the association's guided price of approximately 0.68-0.7 yuan per watt, while the lower price range of 0.6-0.65 yuan per watt is gradually shrinking. The stabilization of centralized market prices is expected to continue until the Chinese New Year.