FiT rates may be lowered in China at around June 30th or September 30th 2017 and the market didn’t seem to be affected by it this week. The increase in module orders continued to boost the number of orders for mid-to-upstream sectors. Last week, the market remained conservative toward demand in October, but this week, most manufacturers have confirmed their prices for November. This caused prices to increase significantly in just one week and may keep rising till mid-November.
The spot price of polysilicon has increased to RMB 120/kg, allowing polysilicon prices to rebound in other markets as well. Although most Chinese manufacturers are running at full capacities, some makers are going through equipment maintenance, leading to limited supply. Prices may be able to increase further to RMB 120-125/kg, stimulating wafer and cell prices.
While overall suppliers are running at full capacities, many multi-Si wafer and cell manufacturers can only keep their utilization rate at 80%. It’s too late for them to optimize their capacities to respond to the rising demand, allowing prices in mid sectors to increase the most among all other sectors of the supply chain. Wafers with higher qualities suffered from short supply, resulting in a surge in mono-Si, super-high and high-efficiency multi-Si wafer prices. The average trading price of mono-Si wafers mostly surpassed US$ 0.76/pc and higher than US$ 0.64/pc for multi-Si wafers.
The rapid increase in wafer prices has reflected on cells. Not just PERC cell prices exceeded US$ 0.34/W; the multi-Si cell market saw more significant increase in prices this week. The average trading price of normal cells reached US$ 0.22/W and US$ 0.23-0.24/W for multi-Si cells with efficiency above 18.4%. As for China, it’s about RMB 1.85/W. Multi-Si PERC cells with higher efficiencies witnessed continuous increase in prices too.
Module manufacturers started the production for low-priced orders received previously, boosting the number of orders for mid-to-upstream sectors. However, demand from end-users wasn’t strong enough to allow prices to keep increasing. Therefore, module price stayed flat at RMB 3/W in China, while overseas module prices reflected a downtrend. In addition, due to limited price increase, rapid price rebound for mid-to-upstream sectors, and compressed module profits, prices may soon hit the ceiling for mid-to-upstream sectors of the supply chain. Price increase will face stagnation by mid-November. Manufacturers will be in huge challenges in 4Q16.
(Analysis provided by Corrine Lin, analyst at EnergyTrend. Translated by a contracted translator of TrendForce Corp.)
