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Polysilicon and module prices in freefall

Polysilicon prices have hit a new low, dropping to CNY 35/kg, as per the latest report from China’s Silicon Industry Branch. This steep decline has prompted many companies to start maintenance procedures earlier than planned.

Source: Silicon Industry Branch of China; Chart: Solarbe Global

Compared to April 24th, polysilicon prices have once again witnessed a decline. The average price for n-type silicon dropped to CNY 45.3/kg, while the lowest price for mono popcorn plummeted to CNY 35/kg, surpassing the cash costs of most enterprises.

Notably, the gap between n-type and p-type prices widened this week, with p-type polysilicon dropping up to 9.09%.

Solarbe learned that new deals of polysilicon purchase have started appearing this week, with market inquiries picking up gradually.

However, ingot firms are showing limited interest in accepting goods. This, combined with low transaction volumes due to holidays, is slowing down contract signings.

Sources told Solarbe that at least three companies are undergoing maintenance on their polysilicon production lines, with at least five planning to start maintenance early this month.

Despite this, a few companies have already started new production lines, which are in the ramp-up phase. May production estimates remain stable at 180,000 to 190,000 tons.

Some producers’ maintenance efforts may help ease polysilicon’s oversupply, but downstream inventory remains high, which could slow consumption.

Polysilicon Price Forecast

Despite significant price adjustments, silicon prices have plunged by over 80% from their peak last year.

However, this decline still falls short of market expectations. Coupled with low operating rates in the solar wafer segment, polysilicon prices are anticipated to face continued downward pressure in May.

In this challenging market environment, cost control is increasingly vital for polysilicon firms to sustain market competitiveness and profitability.

Financial reports from polysilicon firms indicate widespread declines in revenue and net profit, with leading companies experiencing losses.

To mitigate these challenges, manufacturers are reducing production costs through technological enhancements and process optimizations.

Across-the-Board Price Decline

In the wafer and cell segments, prices have also seen declines this week.

Solarbe Consulting reveals that wafer production in April dropped by 10.6% compared to the previous month, with significant reductions in production and operating rates.

Cell production capacity is around 61 GW, and is estimated to increase slightly in May.

Presently, wafer prices are notably lower than cash costs, prompting integrated manufacturers to increasingly outsource wafers and reduce self-production proportions. Some specialized producers have redirected their focus towards contract manufacturing.

Inventory consumption is expected to remain the primary theme in the wafer segment in May, with a narrowing trend in price declines.

Meanwhile, in the cell segment, n-type production is currently high, signaling an anticipated stabilization in prices in the short term.

Regarding modules, prices have continued to decline this week.

March 2024 data from China’s National Energy Administration indicates a year-on-year decrease of 32.21% in newly installed capacity nationwide.

Pressure from upstream declines is beginning to impact module prices.

Solarbe’s analysis of over 36.1 GW of PV modules tendered in April reveals that n-type demand exceeded 90%, with average bid prices dropping to CNY 0.885/W (~USD 0.122) for non-framework tenders and CNY 0.874/W (~USD 0.121) for framework tenders.

Overall, while module firms hold varying predictions on future prices, the gradual release of n-type capacity suggests potential for further declines in module prices.

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