The Chinese market has started to hold bids for power plants in February. Judging from the winning prices, modules prices have declined. The winning price for 5MW of Hanwha’s 280W mono-Si modules reached RMB 2.91/W (US$ 0.362/W) and that for 100MW of Jinko’s 270W multi-Si modules reached RMB 2.88/W (US$ 0.358/W), continuously adding pressure to the market price.
According to EnergyTrend’s observation, since many utility-scale power plants haven’t started the operation, demand is lower than expected in February. Module makers face great pressure as module price is rumored to reflect a downtrend. Because module manufacturers’ marketing costs are higher than those of midstream and upstream sectors, they must maintain a profit of about 15% for their orders. But as module prices continue to decline, module makers can only put pressure on cell prices. Therefore, some module makers plan to pay a lower price – US$ 0.05/W (RMB 0.04-0.05/W) for cells this week. Although most cell makers haven’t accepted the bargain, cost reduction is inevitable in the absence of installation boom.
Multi-Si wafer manufacturers have noticed that cell prices will soon weaken; they will not raise the prices in March. The average trading price of multi-Si wafers reached US$ 0.66-0.68/pc (RMB 5.1-5.15/pc). Yet, judging from US$ 0.215/W, cell makers can’t accept multi-Si wafers that cost more than US$ 0.66/pc. Multi-Si wafer makers must have to deal with serious bargain later on.
Like downstream sectors, upstream sectors will soon witness the decline in prices. Polysilicon is expected to face price decline. Although polysilicon is priced at RMB 142-145/kg, with some reaching RMB 147/kg in March, prices should have reached the highest point this year as they are about to face price drop.
Looking ahead for the future, price decline is inevitable for the entire supply chain in the short run. Demand will remain weak during the peak-selling season from February to March. The PV market can only hope that installation boom takes place as soon as possible. Since total Chinese demand may still reach 25GW this year, if demand remains weak in March, demand should begin to increase from April to May, which may lead to stable prices for midstream sectors.
