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Polysilicon prices drop 20%, overcapacity concerns mount

The past week has seen a widespread drop in polysilicon prices compared to April 3rd, as per the latest data from China’s Silicon Branch.

Average prices for n-type polysilicon have fallen to 58.6 CNY/kg, nearing production costs for some companies. Prices for p-type polysilicon have also taken a hit, with dense polysilicon dropping below 50 CNY/kg, hitting a low transaction price of 48 CNY/kg, already below cash costs for some producers.

MaterialPrice Range (CNY/kg)Average Price (CNY/kg)Average Price (USD/kg)Weekly Change (%)
N-type granular51.00-54.0052.007.19-5.45
Mono recharge50.00-53.0050.306.95-19.90
Mono dense48.00-51.0048.706.74-18.83
Mono popcorn55.00-48.0046.406.42-16.99
Created by: Solarbe Global

Earlier forecasts had predicted polysilicon prices would dip below 50 CNY/kg, forcing some capacities out of the market. With this prediction now a reality, attention is turning to which companies will first exit due to growing losses.

The n-p price difference has narrowed slightly in the polysilicon segment, potentially leading to a margin difference of over 7% for polysilicon companies. Companies with higher proportions of n-type polysilicon in their portfolios are enjoying better sales prices, driving further innovation in the sector.

The significant price decline last week is attributed to a new round of contract signings in the polysilicon market.

Some leading polysilicon manufacturers are under sales pressure, leading to across-the-board price adjustments.

However, wafer companies are not showing strong stockpiling intentions, still preferring to purchase lower-quality polysilicon, with overall transaction volumes limited.

Currently, there is an oversupply in both the polysilicon and wafer markets, with inventory levels exceeding normal levels. Thus, periodic price declines are inevitable.

Looking at the raw material side, industrial silicon prices continue to fall, nearing the full cost lines of most enterprises. There is limited room for further significant price declines, which will provide some support to polysilicon costs.

In the short term, polysilicon and wafer prices are expected to continue to decline, putting significant cash flow pressure on some third-tier manufacturers and accelerating industry consolidation.

In the cell and module sectors, prices continued to decline this week.

Recent orders for megawatt-level projects have seen quotations from first-tier and new first-tier companies return to below 0.9 CNY/W, with full freight charges borne, and it is expected that even lower prices will appear in subsequent procurement tenders from China’s state-owned enterprises.

Overseas, from April 1st, India’s ALMM list has been reinstated, resulting in a slight decline in demand, but overall installation demand remains positive.

Data shows that module production remains at a relatively high level in April, with inventory on the rise. Coupled with the significant price drops upstream, it is expected that module prices will still have room to decline in the second quarter.


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