Starting from August 26, LONGi Green Energy began communicating with customers about an increase in wafer prices. The specific adjustments are as follows: the price of the N-G10L product increased from 1.06-1.08 yuan to 1.15 yuan, and the price of the N-G12R product rose from 1.2-1.23 yuan to 1.3 yuan. The new prices will take effect on August 29.
Following this, several other mainstream wafer manufacturers also raised their product prices, collectively pushing wafer prices back to a more rational level. For instance, on August 27, TCL Zhonghuan officially announced a price increase for its wafers. After the adjustment, the G10N is priced at 1.15 yuan per piece, the G12RN at 1.3 yuan per piece, and the G12N at 1.5 yuan per piece.
Judging by the market reaction, this wafer price hike was unexpected. According to data released by the Silicon Industry Branch of the China Nonferrous Metals Industry Association on August 22, the average transaction price for N-type G10L monocrystalline silicon wafers was 1.08 yuan per piece, a 6.5% drop from the previous period. The average transaction price for N-type G12R monocrystalline silicon wafers remained at 1.25 yuan per piece, while the average transaction price for N-type G12 monocrystalline silicon wafers was 1.5 yuan per piece, a 6.25% decline from the previous period.
Both industry leaders did not officially announce their updated prices through official channels. The last price release on LONGi Green Energy’s official website was on December 26, 2023, when the price for P-type M10 monocrystalline silicon wafers (150μm thickness, 182.2*182.2φ247mm) was 2.20 yuan, the N-type M10 (130μm thickness) was 2.35 yuan, and the N-type M11 (130μm thickness) was 2.55 yuan. Comparing the two sets of data, over the past nearly nine months, LONGi's wafer products have seen a price drop of more than 50%. TCL Zhonghuan’s WeChat public account shows that the last price update was on September 26, 2023, almost 11 months ago. At that time, the N-type silicon wafer 182 size (130μm) was priced at 3.20 yuan per piece, while the 210 size was priced at 4.20 yuan per piece.
The drastic price cuts in the photovoltaic (PV) industry are evident. According to the CPIA, since the second half of 2023, the PV industry has experienced significant overcapacity, with prices across the industrial chain, including polysilicon, wafers, and cells, continuously declining. The prices of polysilicon and wafers have dropped by more than 40%, while the prices of cells and modules have fallen by more than 15% in the first half of the year.
Therefore, the recent price increase in wafers is likely a measure of last resort. LONGi Green Energy stated on July 31 on its investor interaction platform that, based on market price estimates, the main photovoltaic chain has been operating at a loss for several months, with some segments even pricing below cash cost. Under these pricing conditions, the operating rates of the main PV chain have been adjusted to relatively low levels. With the demand peak expected in the second half of the year, there will be some support for industrial chain prices. Overall, the company believes that current PV product prices are at a bottom.
LONGi Green Energy mentioned that the company has recently adjusted its wafer (price) because the previous prices had fallen below cash costs. To ensure the healthy development of the market and considering supply and demand, the company modestly raised wafer prices, aiming to steer the industry out of the low-price competition trap and back to a healthy competitive environment.
The price increase in wafers puts immediate pressure on the cell. As the direct downstream of wafers, the cell companies is under no less pressure than the upstream. According to a recent report by TrendForce, the cell segment is currently in a stage of stagnation and reorganization, with overall procurement efforts not being optimistic. Integrated manufacturers have significantly reduced their cell production, and the original demand for wafer outsourcing and OEM has shown signs of fatigue.
The Silicon Industry Branch also mentioned last week that the decline in cell prices has impacted the expectation of price stability for wafer companies, indicating that wafer segments currently lack strong bargaining power.
Market analysts believe that companies like LONGi have long intended to raise product prices, but the lackluster terminal market has made it difficult to justify a price increase. The combination of Zhonghuan's reduced operating rate and the expected reduction in upstream output due to power rationing in Sichuan presented an opportunity to test a price increase.
However, the price hike will need to be accepted by the downstream market, and the leading companies' announced prices serve more as guidance. The actual implementation of the price increase is expected to face challenges.
Industry analysts also pointed out that PV module prices are still falling, and if the wafer price increase is implemented, it will force specialized cell manufacturers to cut production. This would not only raise the cost of purchasing cells for PV module manufacturers but also continue to increase their production costs, making the situation unsustainable and potentially suppressing PV module production.
Source：DT New Material