Brake On PV Price Hike

On October 31, TCL Central announced the latest price of mono-crystalline silicon wafers. In addition to canceling the 158.75 size offer, the price of 218.2, 210, 182 size silicon wafers was reduced by 0.2~0.35 yuan per piece compared with the previous period. Data show that this is the first time that the price of silicon wafers was reduced this year.

In addition, according to the Polaris solar photovoltaic network tracking PVInfoLink quotation (as of November 2), silicon material price has been stable for 9 weeks, 10 weeks of components, overall, the photovoltaic industry chain this wave of price increases seems to have "brakes".

Ma Haitian, deputy secretary general of the Silicon Branch of the China Non-Ferrous Metal Industry Association, said: "The decline in silicon prices must be the first reduction in the price of silicon wafers, which is a direct indicator of the feedback of silicon price reduction." After the reduction of silicon chip price, will the price of silicon material drop as scheduled? Battery, components and other downstream products can usher in price decline?

Rising tide "brake" : both ends of the industry chain maintain stability, the middle stream still ups and downs

There is no doubt that "price" has been a hot topic in the photovoltaic industry chain in the past three years. Glass in 2019, "V" curve in 2020, "ups and downs" in 2021, "fire and ice"... Market demand has kept the price of the PV industrial chain in a "rising" trend for a long time, and this trend has not been checked and even become more fierce in the first three quarters of 2022.

According to the quotation of PVInfoLink tracked by Polaris solar photovoltaic network, after a short decrease at the end of 2021, the price of upstream silicon material has been "galloping" from the beginning of this year to the end of August, and the price of polysilicon material has risen from 230 yuan /kg to 303 yuan /kg, and at its peak it climbed to 310 yuan /kg, an increase of up to 35%.

As the chart above shows, prices rose most from late June to late August. Investigate the reason, silicon link supply is still the essential factor of price rise.

In mid-June, an accident at a leading Chinese silicon factory in Xinjiang caused an unplanned shutdown and overhaul, adding to the already slow release of polysilicon supply. After that, polysilicon enterprises in the high temperature season entered the routine maintenance period one after another, some enterprises cut production due to power rationing factors, and the outbreak of the epidemic in Xinjiang caused the shortage of silicon materials to become increasingly fierce, and the price rose all the way. It was not until late August that the three ministries and commissions issued the Notice on Promoting the Coordinated Development of photovoltaic industry chain and Supply Chain to stop the growth and maintain stability. At present, the price of silicon material is stable at 303 yuan /kg.

The jump in silicon prices has brought about a chain reaction of price increases in the downstream industry chain. The rise of silicon wafers has always been slow, and there were two obvious price increases in July this year.

In the aspect of monocrystal silicon wafer, the average price of M6 reaches the highest of 6.31 yuan/piece, the highest of M10 is 7.58 yuan/piece, and the average price of G12 even exceeds 10 yuan/piece, with an increase of 27%~31%. In the aspect of polysilicon wafer, although the market share decreased sharply, due to the severe contraction of silicon material supply, there was an inverted supply and demand of the product decline period, the price also rose all the way, as of June 29, the last offer, the price also rose to 3-3.2 yuan/piece.

Battery segment and upstream price trends are basically consistent. The Xinjiang Silicon factory accident in June limited the production of silicon wafers, and the price of silicon wafers soared as demand exceeded supply. At the same time, according to PVInfoLink analysis, M10 size in June and July production is not enough for downstream procurement demand, and the shortage of silicon wafers further aggravate the M10 battery supply situation, M10 battery prices continue to rise. In addition to the conversion of production capacity back to M10, some enterprises limited power and stopped work, which also affected the supply of G12 batteries.

Up to November 2, the spot price of batteries still showed a slight rise, and the average price of M6 rose to 1.31 yuan /W, with an increase of 24.8%. The average price of M10 increased by 25% to 1.35 yuan /W. The average price of G12 rose to 1.34 yuan /W, up 29.5%. It is worth mentioning that, on October 25th, although the latest quotation of Tongway battery sheet has not been raised, the thickness of the battery sheet has been reduced. The thickness of the conventional 166 battery sheet remains 160μm, and the thickness of the 182 and 210 battery sheet has been reduced from 155μm to 150μm. Only 4 months have passed since the last thickness adjustment, and the trend of the battery sheet is accelerating again.

As an end product, out-of-control supply chain prices continue to push up component production costs, and component prices keep rising. Up to now, the average price of single crystal PERC conventional components is maintained at 1.93 yuan /W, 182, 210 single-sided single glass is maintained at 1.98 yuan /W, double-sided double glass is maintained at 2 yuan /W; The price of 182 double-sided double glass N-type components is maintained at 2.16 yuan /W. Overseas market, the United States 182/210 single crystal component price rose slightly, currently $0.38 /W, India, Europe, Australia temporarily stable.

In the glass sector, although the price of photovoltaic glass was increased three times in the first half of the year due to the driving factors of rising prices of raw materials, fuel and construction glass at the beginning of the year, with the continuous release of production capacity and the reduction of module operating rate, the market demand weakened, the glass price was always in an orderly downward trend from July to October.

But recently, the price of photovoltaic glass is also brewing. Tangshan Jinxin Solar Energy, a glass company, released a price adjustment letter at the end of October, indicating that the company's glass price will increase by 2.5-3 yuan per square meter. The latest spot price of PVinfolink on November 2 also reflects that photovoltaic glass began to raise its price. The average price of 3.2mm glass is 28 yuan /㎡, and the average price of 2mm glass is 21 yuan /㎡. Since the beginning of the year, photovoltaic glass increased by 9.4%~12%, becoming the smallest price increase of the industry chain since the beginning of the year.

What about the afternoon market?

It is said that demand determines price. How the future price trend, but also from the supply and demand side of the judgment.

From the supply side, according to the statistical data of PVinfolink, up to now, the annual silicon production capacity has exceeded 400GW, and with the trend of wafer thickness thinning over the speed, the silicon consumption per watt is accelerating. By the end of this year, the annual silicon production capacity will quickly rise to more than 500GW, and the component demand in 2023 will fall to about 325-360GW. The shortage of silicon will begin to ease. At the same time, due to the slow release rate of new capacity of silicon, and the growth rate of drawing capacity is still faster than that of silicon, the price of silicon is expected to maintain a relatively gentle downward speed in the early part of 2023.

At the same time, since the beginning of 2021, the ultra-high industry development expectations and "huge profits" from raw materials have attracted a large number of "crossover players" to enter the market, including many "giants" such as Hesheng Silicon Industry, Geely, Qingdian Energy and Qiya Group. Although it takes some time for new production capacity to be released, it can be seen that the silicon material reserve is quite sufficient.

Looking at the demand side, domestically, according to the latest data from the National Energy Administration, the cumulative newly connected scale of photovoltaic power stations from January to September this year has reached 52.6GW. If the installed capacity forecast of "annual newly connected scale of photovoltaic power stations 108GW" is used, it means that 55.4GW photovoltaic projects will be constructed and connected to the grid in the next four months.

As for "the new PV installation opportunity in 2022 will not exceed 100GW", Polestar has conducted a survey, 53% of which gave a negative answer, but also 47% believe that "December is the peak grid connection, the fourth quarter will still be the peak installation season". Strong downstream installed demand for the price to maintain the stability of the bottom support.

On the international front, despite the epidemic, geopolitical conflicts and trade disputes, there is also good news. As port congestion eased and new shipbuilding capacity was released, shipping delays gradually improved, shipping prices slowly returned. In addition, the US announced the suspension of anti-dumping and anti-subsidy tariffs on solar cells and modules imported from four Southeast Asian countries for two years. Therefore, it is expected that the demand for photovoltaic products in the overseas market will increase.

It is worth mentioning that at the policy level, the National Energy Administration and other competent departments have issued important policies and measures for the photovoltaic industry chain issue several times this year.

On August 24 this year, the Ministry of Industry and Information Technology, the Municipal Administration of Supervision, the National Energy Administration had jointly issued the Notice on promoting the coordinated development of the photovoltaic industry chain and supply chain, focusing on stabilizing the market price; In early October, the Ministry of Industry and Information Technology and other three departments collectively interviewed some key polysilicon enterprises and industry institutions, and guided relevant units to strengthen self-inspection and standardized management; On October 28, the National Development and Reform Commission and the National Energy Administration jointly issued the Notice on Matters related to Promoting the healthy Development of the photovoltaic industry Chain, requiring that "multiple measures should be taken to ensure the reasonable output of polysilicon", "Create conditions to support the advanced production capacity of polysilicon to reach production on schedule", and "fully guarantee the power demand of polysilicon manufacturers"... It is not difficult to see that the core of the above policies is to resolve the upstream and downstream capacity mismatch of the photovoltaic industry chain and stabilize the prices of upstream products, so as to ensure the healthy development of the photovoltaic industry.

In general, the supply of photovoltaic industry chain is improving gradually, but the demand end is still strong both at home and abroad, so it will form an effective support for the price of the industrial chain. However, with the top-level regulation, the situation is generally improving, and the healthy and sound development of the photovoltaic industry will be the general trend.