Polysilicon finished higher this week, after snapping a seven-week losing streak last week, as suppliers paused sell-off fueled by concerns over a glut from China's new capacity ramping-up and their rising inventories due to weaker-than-expected sales.
Polysilicon finished higher this week, after snapping a seven-week losing streak last week, as suppliers paused sell-off fueled by concerns over a glut from China's new capacity ramping-up and their rising inventories due to weaker-than-expected sales. Market participants are probably over-estimating the level of polysilicon prices needed to achieve demand destruction and restore market equilibrium because their judgement is over-influenced by recent high prices and fails to give sufficient weight to a longer price history when the largest wafer supplier mislead polysilicon suppliers regarding the downstream market dynamics for their path of inventory clearance to prevent from their solar module inventory write-off.
There was less room for the mono-crystalline wafer to gain ground this week as players expected the prospect of supply growth and accelerating production ramp-up cases to undermine support from the largest wafer supplier's external wafer supply reduction and second-tier players' low inventory. The measures of the largest wafer supplier cutting external wafer supply and the second tier players back to normal inventory had helped stem the rot in mono-crystalline wafer prices, but further reductions in supply, unlikely due to the capacity growth acceleration in China - or a more robust pick-up in demand, unlikely due to China growth slowdown - would be needed for markets to quickly bounce back, industrial professionals said. 210mm mono-crystalline wafer declined on Wednesday, after the biggest 210mm wafer supplier cut its official 210mm solar wafer price quotes to enhance the incentives of 210mm adoption, while 210mm wafer output remained sufficient amid rising polysilicon supply and intensifying 210mm wafer inventory clearance from major Chinese suppliers.
Mono-crystalline PERC cell prices steadied on Wednesday, gaining respite from the previous month's sharp losses as outsourcing markets strengthened, though gains were capped by the sufficient supply situation in major solar cell producer China. Solar cell businesses benefited from the weakening impact of the demand uncertainty as they shook off some of the drag of the overcapacity crisis, and as new export sales growth surged amid a rise in rush order cases in India. It is a cliche to say a market is finely balanced, but in the current case of 182mm mono-crystalline PERC cell this seems an apt description, with the outlook dependent on whether the coming months show China is moderating 182mm solar module capacity expansion, or if its manufacturing lines are still running hard.
Mono-crystalline PERC module prices edged lower this week as overall weak demand from China and some Western countries weighed on market dynamics, even though rush demand from India could not offer most support as solar project developers in India often asked for lower prices even with lower efficiency solar modules. The mono-crystalline PERC module market has made good progress in narrowing slack over the past few weeks, but markets are reluctant to price in a bullish turn for the solar modules given the players' evident concerns over potential overcapacity and low solar investment return impacts on the market. Solar module factory activity in China grew at its fastest pace in three months in January, driven by India rush demand and easing material price pressures, but the solar module market struggled to gather momentum as rising global solar module capacity expansion cases and continued utility solar investment return constraints weighed on market sentiment and global demand, respectively. Unsold solar module stocks in the biggest producers rose to a record high in January, according to a private-sector survey, as weak demand in China and Western countries added to headaches for the largest solar module supplier reaching their plan of destocking.