PVinsights: The Worsening Loses Forces Big Buyers Conservative

Polysilicon prices slightly slid amid thin trading in overseas market. In China, the prices stagnated due to different outlook interpretations from suppliers and buyers. Suppliers intend to raise the price quotes along with multi-crystalline wafers, assuming demand strength would be better than expected in the coming quarter. However, buyers are more pessimistic about future demand and therefore were more conservative at the procurements. Moreover, as major buyers have enough inventories for the moment, they take a wait-and-see attitude. Overseas demand remains weak as wafer producers are holding a low production utilization rate. Although buyers propose lower prices quote, few deals are signed, so the prices only have a moderate modification.


Polysilicon prices slightly slid amid thin trading in overseas market. In China, the prices stagnated due to different outlook interpretations from suppliers and buyers. Suppliers intend to raise the price quotes along with multi-crystalline wafers, assuming demand strength would be better than expected in the coming quarter. However, buyers are more pessimistic about future demand and therefore were more conservative at the procurements. Moreover, as major buyers have enough inventories for the moment, they take a wait-and-see attitude. Overseas demand remains weak as wafer producers are holding a low production utilization rate. Although buyers propose lower prices quote, few deals are signed, so the prices only have a moderate modification.

The slight increase of multi-crystalline wafer prices this week is mainly resulted from the price increasing from third tier buyers in overseas markets, especially for those in Taiwan. In China, multi-crystalline wafer prices remain fairly stable as the price negotiation for July orders is mostly unsettled. Although major multi-crystalline wafer suppliers raise their price quotes this week, their attempts only had limited success as all major buyers firmly refuse to accept any further price hikes. As major buyers perceive that demand in China has started to unwind and will probably weaken further in July, the intention for multi-crystalline makers to raise the pricing is unacceptable. Currently, the deals between big buyers and suppliers are still in a stalemate, while major buyers threaten to cut procurement volumes if multi-crystalline wafer suppliers insist on raising the prices. However, for 2nd tier buyers, they may be forced to accept the price hike since they had limited bargaining power. Meanwhile, multi-crystalline wafer prices in overseas have an obvious increasing this week. In overseas markets, particularly in Taiwan, the shortage of multi-crystalline wafer resulted from the limited supply by major Chinese wafer suppliers and the low wafer utilization rates of Taiwanese suppliers, forces these buyers to accept the price rising in order to secure enough supply quantities. On the other hand, the price drop of mono-crystalline wafer continued this week since the demand for mono-crystalline wafer has obviously waned. The increasing downside risks of mono-crystalline wafer price trend are compounded by the growing supplies and the weakening demand.

Multi-crystalline cell prices stall this week as price negotiation hit a deadlock. Even though the market momentum has been slowing down as China installation rush stepping into the end phase, solar cell suppliers still intend to raise the pricing by leveraging the increasing costs of multi-crystalline wafers. However, since the solar cell buyers have been facing losses due to the elevated upstream prices, they could no longer tolerate further price spike under the circumstance of depressed module prices. Considering the demand is set to soften in July, major solar cell buyers have made their attitude clearly that they would not accept further price hike or they would choose to reduce their cell orders due to declining margin. Moreover, since the current price level of multi-crystalline cells are still profitable for Chinese solar cell makers and around break-even-points for overseas solar cell makers, some solar cell makers agree with the stable price, but currently some are still trying to raise price quotes to see whether or not the buyers are willing to accept the price hike in July. On the other hand, definite decline in demand sends mono-crystalline cell prices lower this week. The constantly slide in mono-crystalline cell prices clearly indicates that the demand remains subdued. Furthermore, the ramp-up production of mono-PERC also creates ongoing worries about oversupply, which consequently suppressing prices.

Multi-crystalline and mono-crystalline module prices are pressured by severe competitions in major solar markets. Prices in China have a precipitous drop with faltering domestic demand, driving suppliers into intensifying competitions. As most orders have been settled, module suppliers could not raise the prices along with upstream products. In the meantime, suppliers have been raising productivity and suffered from severe bidding. In the U.S. market, most buyers have only been inquiring prices but without actual procurement. Although the investigation of 201 Section may force American buyers to advance their procurement, such effects have yet to be realize at the moment. Prices are stable in EU as demand fell on summer vacation. Most European buyers have finished their preparations so the demand would remain weak in the coming two months and prices only had little volatility. Prices in Japan dipped as competition worsen for the coming summer vacation; however, as the demand drop is weaker than the expectation, the prices only had a small reflection. Competitions go on in India and other emerging countries, driving the module prices lower and lower. The 2nd and 3rd tier Chinese players had driven 1st tier Chinese suppliers to correct their prices as well.

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