PVinsights: Solar Edged Down, Thin Trading Limited Losses

Polysilicon prices edged lower this week, declining for a second week and sapping more strength from a third-quarter rally, amid signs that global glut in downstream may not be clearing as the bulls had hoped. The prices tiptoed lower in China, pressured by weaker multi-crystalline wafer prices but supported by the tight supply and the solid demand from mono-crystalline wafer makers which afford polysilicon's high prices. The polysilicon supply took a brief knock in overseas market as the explosion of Wacker's American plant restricted the supply, although healthy inventories and other suppliers, like Hemlock and REC silicon, offered support to the polysilicon supply.


Polysilicon prices edged lower this week, declining for a second week and sapping more strength from a third-quarter rally, amid signs that global glut in downstream may not be clearing as the bulls had hoped. The prices tiptoed lower in China, pressured by weaker multi-crystalline wafer prices but supported by the tight supply and the solid demand from mono-crystalline wafer makers which afford polysilicon's high prices. The polysilicon supply took a brief knock in overseas market as the explosion of Wacker's American plant restricted the supply, although healthy inventories and other suppliers, like Hemlock and REC silicon, offered support to the polysilicon supply.

Multi and mono-crystalline wafer prices dropped as market assessed the fallout from waning downstream demand and weakening Chinese Yuan. One of the major multi-crystalline wafer suppliers reduced their prices for October, dragging the overall average multi-crystalline wafer prices this week. In the meantime, mono-crystalline wafer prices were under pressure from the weakening demand and the falling RMB. Although the decline was limited this week, it is expected to see further reduction when the decreasing demand accelerates.

Multi- and mono-crystalline cell prices fell limitedly this week, but there were signs that widespread market concerns might contribute to falling volume and weakening prices after the Golden Week holidays in China and Korea. The dim demand outlook for October, especially in China, and the healthy inventory levels slowed down the cell procurement and explained why buyers requested for lower cell prices. Major Chinese module makers also reduced the cell purchasing volume from overseas market, dampening the cell prices for overseas market. The price reduction of mono-PERC strengthened more significantly as the competitions on higher efficiency intensified.

Solar panel makers were hampered by the demand in Japan and Euro that was declining at faster rates in late 3Q17 and a strength in the U.S. dollar, which makes panel prices lower in these regions as translated into dollar term. While global module prices were likely to keep dropping, the pace in China could moderate as suppliers say healthy stock levels and more distribution generation and Top Runner projects could keep the price reduction slower than expected. The U.S. demand was maintained before the announcement of final tariff of safeguard investigation as suppliers continued to ship the modules to the U.S. in the final moment.

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