PVinsights: Polysilicon Rout Sends Downstream Components Slumping

The slump of polysilicon price has initiated since late August as buyers buying power has been significantly hampered due to slashed downstream demand and prices that they could not bear with high-priced raw materials and threaten to cut more polysilicon procurements. A previous attempt to sustain polysilicon prices in China has failed and the polysilicon suppliers in China have lowered price drastically in order to lessen its piled-up inventories as well as to secure limited orders. Moreover, as the quarterly financial accounting process closes at the end of September, polysilicon suppliers are having compounded pressures to dump excess stockpiles, pushing down polysilicon prices further.


The slump of polysilicon price has initiated since late August as buyers buying power has been significantly hampered due to slashed downstream demand and prices that they could not bear with high-priced raw materials and threaten to cut more polysilicon procurements. A previous attempt to sustain polysilicon prices in China has failed and the polysilicon suppliers in China have lowered price drastically in order to lessen its piled-up inventories as well as to secure limited orders. Moreover, as the quarterly financial accounting process closes at the end of September, polysilicon suppliers are having compounded pressures to dump excess stockpiles, pushing down polysilicon prices further. Following the slump in China, overseas polysilicon prices also extend the drop this week, but that correction is less severe than China since the price baseline is relatively low. As the result, with depressed downstream demand and prices, polysilicon price falls more dramatically this week.

The drop of multi-crystalline wafer price continues to accelerate this week due to the domino effects on collapsing polysilicon prices. Multi-crystalline wafer prices have plummeted significantly since 3Q, with correction heading toward more than 20% drop so far. Such sharp fall of multi-crystalline wafer is mainly attributed to low order visibilities and reduced bargaining power of wafer suppliers. As end market demand turns slower, multi-crystalline wafer buyers have adjusted down their production rates and the demand of multi-wafer procurement also drops correspondingly. In addition, with deteriorated polysilicon prices, multi-crystalline wafer supplier have regained more flexibility on lowering their price quotes and pick up limited orders, driving the price of multi-crystalline wafer continue to plunge sharply this week. On the other hand, mono-crystalline wafer prices continue to remain pressured this week, but the drop is less severe than multi-ones.

Both multi-crystalline and mono-crystalline cell prices slid to another fresh low this week. Although solar cell makers attempt to lower utilization rates, the limited curtailment in production does not help to stabilize solar cell prices successfully. Fears about the oversupplied nature are the reasons behind the dismal performance for multi-crystalline cell prices. In addition, the 1st tier integrated Chinese modules makers, who have been struggle with liquidity issues because of delayed FIT payment, have sharply reduced solar cell procurement, focusing on fulfilling its in-house cell capacity, and reduce OEM orders, leading solar cell makers who rely heavily on outsourcing orders to suffer with ample stockpiles and slashed prices. Evidence of record low prices continues to be witnessed as solar cell makers continue to press down cost in order to meet the bargain requests from buyers and to win orders successfully. Similarly, mono-crystalline cell price fall accordingly this week as mono-crystalline cell makers follow the correction of multi-crystalline cell price closely. As the result, , both multi-crystalline and mono-crystalline solar cell prices extend the losses as the persistence of the supply overhang and slashed material costs have given solar cell makers with more flexibility to offer more discounts.

Both multi-crystalline and mono-crystalline module prices extend the slump 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. In China, Chinese module makers leverage aggressive pricing as striving to win the limited domestic solar projects. Furthermore, the battlefield of Chinese module makers also extends from China to the rest of the major solar markets. The 2nd tier Chinese module producers, who suffer the most with accumulated stockpiles, continue to dump excessive inventories in India, Japan, and the emerging countries, where no punitive tariff enforced, and driving down the solar panel prices in these regions. 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. Consequently, solar panel prices continue to drop extensively this week as Chinese players stir up the turbulence over the global solar markets.

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