Photovoltaic scheduled production for July was released. Have polysilicon and PV wafers prices really hit bottom?

Since mid to late June, due to the concentrated procurement of polysilicon and wafers, coupled with the production cuts in the upstream, the sentiment in the upstream photovoltaic market gradually picked up, with rumours of bottoming out. Polysilicon prices have stopped falling for two consecutive weeks. The transaction prices of wafers continued to shift upwards, and by the end of June, the price of N-type 183.75 wafers even increased. The scheduled production for July has been released. Are polysilicon and wafers prices really going to bottom out?

Firstly, for polysilicon, the impact of concentrated procurement was relatively limited. Although polysilicon inventory dropped significantly, it rebounded around last week. According to SMM statistics, actual polysilicon scheduled production in June dropped to 150,100 mt. Due to maintenance by several producers, although polysilicon scheduled production saw a 14.7% MoM decrease, it still showed a surplus compared to the scheduled production of wafers, which was less than 50 GW. According to SMM, at least five polysilicon producers will increase their scheduled production MoM in July, including some that are resuming production. With the impact of four producers reducing production, July's polysilicon scheduled production is expected to reach around 155,000 mt, still showing a surplus compared to wafer scheduled production.

SMM believes this will have a bearish impact on polysilicon prices. In July, polysilicon prices still have some room to decline, but considering the current production costs and market trading atmosphere, the downward space is expected to be limited.

As for wafers, SMM believes they have relatively better short-term support. According to SMM data, the scheduled production of domestic wafers in June will drop to 49.2GW, not only showing a significant decrease compared to May but also falling short of the approximately 54GW scheduled production of solar cells. Together with the concentrated orders, wafer inventory declined significantly, supporting wafer prices. Currently, there is a shortage of N-type 183.75mm wafers among several manufacturers. However, it should be noted that the inventory data is based on A-grade wafers, and some manufacturers currently have a large amount of B-grade wafers. This poses a hidden danger to the current market.

Looking ahead to the scheduled production of wafers in July. According to SMM data, the domestic scheduled production of wafers in July is expected to reach 50.9GW, mainly concentrated in the production increase of three companies, while the rest remain flat or slightly decrease. Compared to the approximately 51GW of solar cells in July, it is in a tight balance, which will indeed provide some support for wafer prices. However, it should be noted that if polysilicon prices decline, it may have a bearish impact on wafer prices, but profits are still expected to recover.