PVinsights: Polysilicon collapse triggers downstream price routs

Polysilicon price is not out of the woods yet with downstream demand remaining a significant concern. The purchasing power of polysilicon buyers has been hampered as the wafer prices see enlarged correction and the domestic demand is also noticeably slower. Unclear order visibility has pressured on polysilicon suppliers to release more price discounts. Although Chinese polysilicon suppliers have tried to curtail production output by conducting annual maintenance, such attempt is unlikely to temper the weakening market sentiments. In addition, as the quarterly financial accounting process approaches, the accumulated inventory pressure also forces polysilicon suppliers to dump excess stocks and sending the price down further.

Polysilicon price is not out of the woods yet with downstream demand remaining a significant concern. The purchasing power of polysilicon buyers has been hampered as the wafer prices see enlarged correction and the domestic demand is also noticeably slower. Unclear order visibility has pressured on polysilicon suppliers to release more price discounts. Although Chinese polysilicon suppliers have tried to curtail production output by conducting annual maintenance, such attempt is unlikely to temper the weakening market sentiments. In addition, as the quarterly financial accounting process approaches, the accumulated inventory pressure also forces polysilicon suppliers to dump excess stocks and sending the price down further. On the other hand, polysilicon prices in overseas also follow the drop in China, extending the prices slump this week. As the result, polysilicon collapse has yet to see any sign of alleviation, triggering the price routs over the supply chain.


Affected by the shattering polysilicon prices, the domino effects have extended to the downstream components, particularly evidenced by sharply falling of the prices of both multi-crystalline and mono-crystalline wafers. Multi-crystalline wafer prices continue to plummet obviously this week. Although the demand in downstream solar cell does not seem to worsen further, the procurements by wafer buyers are still conservative since wafer buyers anticipate for further prices reductions with the slashing polysilicon prices. In fact, the enlarged correction of polysilicon price indeed helps wafers makers to regain more flexibility on lowering the price quotes. The 2nd tier multi-crystalline wafer makers who suffer the most from the market downturn react soon and quotes lower to find more deals to relieve part of their inventory pressures. Such moves by the rivals force the 1st tier multi-crystalline wafer makers to follow the price downtrend as well, sending multi-crystalline wafer prices to drop steeply this week. On the other hand, following the price slump of multi-crystalline wafer, mono-crystalline wafer prices also remain pressured this week. However, the drop of mono-crystalline wafer is noticeably slower as leading mono-crystalline wafer makers are more hesitate to follow the drastic correction with multi-ones.

Enlarged correction of wafer prices continues to weigh on both multi-crystalline and mono-crystalline cell prices, as the reduced costs have given suffocated solar cell makers the ability to meet the bargaining prices that asked by the buyers. As multi-crystalline prices have plunged sharply with more than 30% over the past three month, multi-crystalline cell prices have dropped to an extent that solar cell makers can barely make further prices reductions as to safeguard the cash costs. However, with the enlarged multi-crystalline wafer price correction following the collapse of polysilicon, the drop of multi-crystalline cell prices continues to extend this week. On the other hand, in prevention of demand shift, mono-crystalline cell makers follow closely along with the correction of multi-crystalline cell prices that continue to drive down mono-crystalline cell prices this week. As the result, with enlarged correction of wafer prices, the price downturn of both multi-crystalline and mono-crystalline prices are not over yet.

The prices of both multi-crystalline and mono-crystalline modules continue to tumble this week. Record capacity expansion, low bidding prices and an oversupply situation are driving down solar markets, which in turn is fueling a nationwide competition. The solar panel prices in China have experienced a great pressure as the competition among the suppliers become extremely intense in order to compete for limited solar projects especially after more domestic production capacities ramped up by Chinese 2nd tier suppliers. Meanwhile, in order to digest the excess stockpiles that left from slow China demand, the 2nd tier Chinese module suppliers also intend to strengthen its presences in the key solar markets, such as India and SEA, where no punitive tariff are enforced, to digest their inventories. On the other hand, Chinese 1st tier module makers utilize their increasing production capacities in SEA to disrupt the balance of the US and EU market, lowering regional solar panel prices. Therefore, the fierce competitions that dominated by the Chinese module players have spread from China across the world, leading solar panel prices to drop extensively this week.

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