The price of silicon material has dropped four times in a row, and the photovoltaic installation is ready to start in the peak season, but the game of the industrial chain is still going on.

"I can finally catch my breath!" On August 2, a photovoltaic battery manufacturer told the Financial Associated Press, "We predict that the price of silicon has peaked. Although the current price is still very high, the trend behind should be optimistic, at least the business will improve in the second half of the year."

In the first half of this year, the head battery maker suffered a rare loss due to high upstream costs and insufficient operating rate. According to the data released by the Silicon Industry Branch, the price of polysilicon showed a slow downward trend, and the quotation was lowered four times in a row in July, with the largest drop of nearly 2%.

For the future market, after communicating with photovoltaic silicon-related enterprises, a reporter from the Financial Associated Press found that the views of the upstream and downstream are not consistent: battery chips and assembly companies generally believe that the continuous decline in July has released warmer messages, and the motivation for price increases has weakened, and business is expected to improve in the second half of the year; in the view of silicon manufacturers, transaction prices follow the market, and it is difficult for silicon prices to fluctuate sharply under the support of silicon wafer demand.

At present, the price of silicon is still high after falling slowly, indicating that this top-down game of silicon may continue in the tide of installation.

After slowing down, the price support is still there.

Silicon prices, which have risen continuously in the first half of the year, have loosened and have fallen since the first week of July and are now falling for four consecutive years. The latest data from the Silicon Industry Branch show that the transaction price of single crystal compound material is 20-211000 yuan / ton, with an average price of 206100 yuan / ton; the transaction price range of single crystal compact material is 19.7-207000 yuan / ton, with an average price of 202900 yuan / ton; the transaction price range of single crystal cauliflower is 19.6-204000 yuan / ton, with an average price of 199500 yuan / ton.

Although the cumulative decline in July is generally less than 10,000 yuan / ton, for the first half of the year as high as 150% increase, the slow decline after the peak has been to let the middle and lower reaches manufacturers breathe a sigh of relief.

A component business person also told the Financial Associated Press that the current price of silicon is still about 200000 yuan / ton, much higher than the same period last year, but the continuous decline in July still released a warming message. At present, the upstream and downstream manufacturers have a strong desire to remove inventory, and after the relationship between supply and demand has improved, there is great hope for business improvement in the second half of the year.

The third quarter is the off-season of photovoltaic, but the fierce game involving silicon has not stopped. A reporter from the Financial Associated Press noted that it had been reported that the price reduction of silicon or a boycott by downstream battery wafers and component companies required silicon manufacturers to adjust prices. Some relevant business people also said that, as a major customer of silicon, they will strive for the rights and interests in this regard, through strategic cooperation and other ways to reduce procurement costs as much as possible.

However, the actual effect of this approach may not be significant: on the one hand, 90% of silicon transactions are long orders with unlocked prices, and when the price is discussed in January, it is not easy for downstream to ensure the supply of silicon, even if the head manufacturer Longji, in the first half of the year, also arranged to cut production due to the shortage of silicon wafers.

On the other hand, the current support for the price of silicon still exists. An industry insider told the Financial Associated Press that it is not very meaningful for downstream companies to negotiate or boycott high-priced silicon. Although the trade association can play a certain guiding role, such as eliminating the unfavorable factors of hoarding and driving up the price, the actual transaction price must be based on the relationship between supply and demand.

This statement has also been confirmed by a silicon manufacturer. He told the Financial Associated Press that the price of silicon was in line with the market and had experienced a low price of tens of thousands of yuan last year. The difficulty and progress of silicon production expansion is greater and slower than that of silicon wafer factories, and there is still a gap downstream. At present, the demand for downstream silicon wafers is still very strong, which will provide a good support for the price of silicon materials.

The pressure in the middle and lower reaches is expected to ease.

Data show that from January to June this year, the new installed capacity of domestic photovoltaic is 14.1 50GW. If the annual 36GW installed capacity is expected, there are still about GW installed capacity to be completed in the second half of the year, and may be concentrated in the fourth quarter.

Although the price of silicon is still high, it does not affect the expected installation for the whole year. According to industry analysis, due to the rigidity of domestic photovoltaic demand, it is unlikely to delay grid connection. Therefore, for battery chip and component companies, at least this year also need to go through the expansion of silicon production before the production capacity hit the ground before the final "suffering".

At present, according to the collection information and enterprise feedback, the bid price of the component is still about 1.8 yuan per watt. According to PV-info analysis, 1.8yuan is the critical point for the downstream power station to accept the price. If the component cost is higher than 1.8yuan, it will exceed the bearing capacity of the power station. This also shows that under the current price of the industrial chain, the investors of components and power plants still have profits, but they have been diluted to the limit.

After the price of silicon material reaches its peak and slows down, the business of components and battery companies will also tend to take a turn for the better. A business source told the Financial Associated Press that the previous high price of silicon was due to the expansion of silicon wafer manufacturers. After the production capacity of silicon wafers is basically determined, the price of silicon will lose the incentive to rise again. At present, the silicon material is still high, and the improvement of cost pressure is not obvious, but if the downward trend continues, it will be very good for photovoltaic enterprises in the middle and lower reaches.

Longji shares also said in previous research that silicon material is an imbalance between short-term supply and demand, there is no technical bottleneck, it is mature technology mastered by the industry, and the rest is the problem of production expansion: downstream growth blocks, production expansion needs cycle, resulting in an imbalance, upstream enterprises will increase production capacity and meet demand in the future.

The price follows the market, and the supply is tight during the year.

In fact, as early as last year, the Silicon Industry Branch publicly warned of a tight balance between supply and demand in the market in 2021. According to the statistics of the Association, China's polysilicon production capacity is 420000 tons / year by the end of 2020 and 495000 tons / year in the first half of 2021, and is expected to reach 54.4 by the end of 2021. Ten thousand tons per year.

Prior to this, the high profits of silicon materials attracted many enterprises to expand production, which will be released in the fourth quarter of this year. According to the production expansion cycle, the projects to be put into production in the second half of the year include 40,000 tons of new capacity and 50,000 tons of expanded production at Tongwei Yongxiang's Leshan base in Sichuan, 50,000 tons of new production capacity in Baoshan, Yunnan Province, and 20,000 tons of production capacity of Poly Xiexin in Xuzhou, Jiangsu Province. the new special energy production capacity is optimized to increase by more than 10,000 tons in Urumqi, Xinjiang, and Oriental hopes to have 30,000 tons of new production capacity for the whole year.

However, as the silicon production capacity still has about half a year of capacity and quality climbing period, the full release and the formation of effective supply is expected to be 2022.

Before that, the rapid growth of downstream battery production capacity still exceeded the supply of silicon in the short term. According to the Silicon Industry Association, in the first half of 2021, China's wafer production was 103.7 GW, an increase of 39.4% over the same period last year, while the production of battery modules was 92GW and 80GW, respectively, an increase of more than 30% over the same period last year.

Therefore, the rapid increase in the production capacity of silicon wafers and battery modules in the downstream photovoltaic manufacturing links has intensified the competition in the industry, and in the peak installation season, the expectation of tight silicon material may be stronger. An industry analyst told the Financial Associated Press that judging from the pace of downstream production expansion of silicon materials, polysilicon continued to keep a tight balance between supply and demand in 2021 and 2022, until oversupply began in 2023 after more intensive production capacity fell to the ground in the fourth quarter of 2022. Only when the "tight" degree of the silicon market alleviates, can the silicon material enter a substantial general decline.