In the turmoil of the photovoltaic industry chain, polysilicon, wafers, cells, and modules face new changes and challenges in december. The following is an analysis of the current market situation:
- Polysilicon: Production Cuts Emerge, Prices Stabilize
Data shows that the expected polysilicon production in December is 94,600 tons, a significant decline compared to 111,000 tons in November. This change is mainly due to production cuts by leading polysilicon companies in the Sichuan and Yunnan regions, as well as the shutdown of two small second- and third-tier enterprises.
In the future, granular silicon may continue to see production cuts. A Sichuan base has already reduced its Leshan production capacity in December due to high electricity prices and may further reduce production or even shut down in January. At the same time, small enterprises may further cease operations, but their impact on the overall market will be limited.
It is worth noting that leading companies may shut down all their production capacity in southern Sichuan in January, further intensifying market supply tightness.
Regarding prices, due to significant historical inventory pressure, with inventory reaching 290,000 tons at the end of October, prices are unlikely to rise in December but are also unlikely to fall further. Seller enterprises gained a slight advantage in November’s contract signing rhythm, maintaining the price floor.
- Wafers: Inventory Reduction Underway, Production Increases Against the Trend
The expected wafer production in December is 42 GW. Despite the inventory reduction process in polysilicon, inventory pressure remains substantial. However, the wafer market has shown some resilience, with production slightly increasing to around 42.5 GW in December.
Leading dual giants have taken steps to increase production, and specialized enterprises have taken even more significant steps to expand. Wafer inventory remains healthy, with only 27 GW in inventory as of November 30.
Looking ahead, with the increase in cell production, wafer inventory is expected to decrease further. If market sentiment remains positive, wafer inventory could drop to around 20 GW. In January and February next year, wafer production is expected to increase further to 45-47 GW. Although January coincides with the Spring Festival, the balance between supply and demand is expected to drive an increase in wafer production.
- Cells: Inventory Near Zero, Prices Rising
The cell market is the best-performing segment among the four, taking the lead in price increases. The price of 183 mm cells has risen to RMB 0.28, with inventories at nearly zero across the board.
In December, global cell production will reach 50.8 GW, with domestic plans accounting for approximately 47.8 GW. Leading specialized enterprises, such as some companies in Yibin, Sichuan, are achieving full production, and overall order delivery is performing well.
However, in January, conditions for production increases in cells are unlikely. Module production is likely to maintain reduction steps later, and cell inventory is not suitable for long-term storage.
Additionally, at the Yibin meeting, leading cell enterprises may sign production reduction agreements with the association, which could lead to a decrease in overall cell production.
- Modules: Strong Price Increase Expectations
Following the October meeting, module tender prices moved toward RMB 0.68, but delivery prices have not yet recovered to RMB 0.68. Module production in December is expected to decrease to between 45-47 GW, with leading enterprises reducing production to manage inventory.
Module inventory faces some pressure, remaining at around 53.4 GW. However, there is a high probability that module prices will rise in December and January.
In addition to being driven by upstream cell and wafer trends, price increases in auxiliary materials such as glass and encapsulation films also provide support. Glass prices are expected to return to previous levels, while encapsulation film price increases may not be significant but will adjust slightly based on overall market sentiment.
- Auxiliary Materials: Glass Price Increases, Encapsulation Film Under Pressure
The price of 3.2 mm single-layer coated glass has increased from RMB 21, and it is expected to return to previous levels. The main reason for the glass price increase is previous maintenance and large orders from module manufacturers.
As for encapsulation films, EVA prices have risen over the past month, affecting costs by about RMB 0.3. However, the extent of the price increase for encapsulation films is unlikely to cover the previous raw material price hikes, leaving PV manufacturers to bear part of the cost pressure from upstream material price increases.
- Industry Self-Regulation and Policy Adjustments
The cell segment may take faster self-regulation measures. Associations have set the tone for production reductions next year, potentially imposing policy disadvantages on outdated capacities.
The capacity reduction policy aims to address issues in 2025 and beyond, focusing on quotas and energy consumption control. Currently, industry self-regulation is mainly coordinated by associations, with the National Development and Reform Commission supporting self-regulation efforts.
Although the policies are relatively moderate, enterprises exhibit differing attitudes toward these policies.
Conclusion
In summary, the PV industry chain is facing a complex and volatile market environment. Each segment must closely monitor market dynamics and policy changes to respond to future challenges and opportunities.
Source：https://mp.weixin.qq.com/s/oFK_aEVJ2-KCgSECV4s7ew
