Electrical Equipment / Components & Telecoms

Since the second half of 2020, due to factors such as the continued strong market demand and insufficient supply flexibility of the industrial chain, the price of PV upstream polysilicon has risen sharply from a minimum of less than 60,000 yuan per ton. After a brief retreat at the end of 2021, it will resume its upward trend in 2022. So far, it has exceeded 300,000 yuan / ton, Huacheng Import and Export Data Observation Report.

At the same time, the price increase of the photovoltaic industry has also been transmitted from polysilicon to downstream silicon wafers, cells, and modules. The high price of the supply chain reflects the imbalance between supply and demand to a certain extent, but it also has an impact on the healthy development of the industry, resulting in large-scale photovoltaic power plants at the terminal. Investment stagnated.

With the arrival of the traditional peak season for the installation of large-scale ground photovoltaic power plants in China in the fourth quarter, the industry has been worried about whether the rising supply chain prices will cause the peak season to stall this year. However, analysts said that the momentum for the price of silicon materials to continue to rise is weakening, but it is difficult to say that it has entered a downward channel. The peak demand season in the fourth quarter has started, and the price game in the photovoltaic industry chain has entered a critical period. Specifically:

In the aspect of silicon material, the main price of single crystal dense block material is currently in the range of 303-306 yuan per kilogram. The overall price trend has stabilized before the long holiday.

Judging from the signing of long-term orders, although the production of silicon materials has been increasing, the overall downstream demand for silicon materials and the price of silicon materials have not changed significantly since the silicon materials are still in no inventory. The mainstream price of long-term orders was basically maintained at the level of the previous month.

According to PVInfolink's analysis, the new production capacity of the silicon material link will continue to increase in the fourth quarter, and the quarter-on-quarter increase will continue to expand, which will usher in the peak period of production capacity release. In September, the overall supply of silicon materials increased month-on-month, and the effective increments were mainly concentrated in the latter half of the year. With the coming of the National Day holiday, the major upstream manufacturers have successively started negotiations and signing of new orders last week to ensure the continuous and stable operation of the production process. .

According to Huacheng Import and Export Data Observation and Report, due to the strong demand in overseas markets, Sichuan will cut electricity in August 2022, and the supply of silicon materials will be lower than expected. Therefore, the price of silicon materials will remain high and fluctuate, with an average price of 305,000 yuan per ton. It is expected that the current price of silicon material has been at the top, with limited upward space, and the production capacity of more than 300,000 tons will reach full production in September 2022. The supply will increase quarter by quarter, breaking the tight supply and demand situation. It is expected that the price of silicon material is expected to start to decline in 2022Q4.

In the silicon wafer segment, data from the Silicon Industry Branch of China Nonferrous Metals Industry Association showed that the price range of M6 monocrystalline silicon wafers (166mm/160μm) last week was 6.31-6.43 yuan/piece, and the average transaction price remained at 6.36 yuan/piece, week-on-week. Flat; the price range of M10 monocrystalline silicon wafers (182mm/155μm) is 7.52-7.68 yuan/piece, and the average transaction price remains at 7.58 yuan/piece, flat on a week-to-week basis.

In addition, LONGi Green Energy's latest quotation for monocrystalline silicon wafers announced on September 26 also showed that compared with July 26, the RMB prices of different products did not change.

Industry insiders believe that the price of silicon wafers does not rise, which is rare in the atmosphere of rising industry quotations in the past two years, which means that the price of the photovoltaic industry chain will remain stable for a period of time in the future.

In the cell segment, Tongwei Co., Ltd. (600438.SH) once again announced an increase in cell prices, of which mono-Si PERC 166 cells were quoted at 1.31 yuan/W, up by 0.02 yuan/W; mono-Si PERC 182 cells were reported at 1.33 yuan/W, up 0.02 yuan/W; monocrystalline PERC 210 cells were reported at 1.33 yuan/W, up 0.03 yuan/W, Huacheng Import and Export Data Observation Report.

This is the 11th time that Tongwei Solar has adjusted the price this year, and the second time this month that it has announced an increase in the price of solar cells. There are multiple reasons behind the continued rally in battery cells. First, it is strongly supported by the increase in the production schedule of module manufacturers, and the downstream is actively rushing for goods; second, the battery leader Tongwei has begun to expand its module business. With the increase in the self-use rate of battery cells, the actual sales volume of cells to the outside world is limited.

As a midstream cell segment, due to the huge upstream cost pressure that needs to be transmitted, Tongwei’s previous price adjustments were often after the quotations of silicon wafer leaders such as LONGi Green Energy and Zhonghuan. Recently, Tongwei began to adjust prices frequently, which may also indicate that new changes have occurred in the upstream and downstream games of the photovoltaic industry.

According to the Huacheng Import and Export Data Observation Report, analysts said that the upstream and downstream price gap reversal this time may be a harbinger of the price center differentiation of the photovoltaic industry. Previously, the profitability of the photovoltaic industry chain has always been characterized by a decline from upstream silicon materials to mid-stream and downstream modules, as is the transmission of price increases. The "contrarian" price increase of cells this time shows that the strong downstream demand has improved the profitability of cells and achieved a reversal of the predicament.

In the module segment, with the rise in upstream high-efficiency cell prices, the expectation of domestic module prices falling has been broken in the short term. It is expected that domestic module prices will continue to remain stable and firm.

The Silicon Industry Branch said that the operating rate of module factories increased slightly last week, mainly because the rigid demand for domestic installed capacity in the fourth quarter is expected to stimulate consumption. In terms of exports, the North Stream pipeline has recently leaked, and Europe's heavy reliance on traditional energy has made the crisis intensified. This has made Europe begin to focus on developing new energy this year, so in the long run, it will be good for module exports.

Overall, the profit transfer of the photovoltaic industry chain due to price changes, especially after the release of silicon material production capacity, cells, EVA and other links that are expected to be in short supply will be sought after by funds. As the price game in the industry chain enters a critical period, the good days for the mid- and downstream photovoltaics are coming, Huacheng Import and Export Data Observation Report.