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According to information released by several industry organizations, this week saw a leading silicon wafer company take the lead in reducing production.
Reporters learned from multiple industry insiders that the major silicon wafer manufacturer that reduced production this week is TCL Zhonghuan, with its operating rate dropping to 70%. However, a source from TCL Zhonghuan told reporters that the company has made a slight adjustment to its operating rate, but the reduction is not as exaggerated as it seems.
It has come to the attention of the reporter that another major silicon wafer manufacturer, Longi Green Energy, has not seen much change in its silicon wafer operating rate. Industry insiders have also provided feedback to the reporter that Longi Green Energy has increased production, but the load remains low.
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It is worth noting that in the past, the Silicon Industry Branch of the China Nonferrous Metals Industry Association would release the industry's silicon wafer operating rate along with the weekly publication of the industrial chain prices. However, this week, this data is unusually "absent." For reference, last week, the operating rates of two first-tier companies were maintained at 55% and 95%, respectively. Regarding the absence of silicon wafer operating rate disclosure by the Silicon Industry Branch this week, industry insiders have reported that it was not released considering the impact on the companies.
An important context for the major silicon wafer manufacturers' production cut is the continued decline in silicon wafer prices. According to data from the Silicon Industry Branch, this week's silicon wafer prices have seen a significant drop. Among them, the average transaction price of N-type G10L monocrystalline silicon wafers is 1.08 yuan per piece, with a month-on-month decrease of 6.5%; the average transaction price of N-type G12R monocrystalline silicon wafers remains at 1.25 yuan per piece; the average transaction price of N-type G12 monocrystalline silicon wafers is 1.5 yuan per piece, with a month-on-month decrease of 6.25%.
The reasons for the significant price reduction of silicon wafers this week are multifaceted. The Silicon Industry Branch pointed out that previously, the premium capacity of large-sized silicon wafers has been significantly weakened (calculated on an equal area and equal price basis), leading to a relatively high concentration of silicon wafer inventory. This week, the leading companies have accelerated price reductions to clear inventory, directly causing a significant drop in the prices of large-sized silicon wafers. In addition, after two weeks of price increases, the silicon material prices began to stabilize this week, and the support from raw material prices has also gradually weakened.
The quotations for silicon wafers and battery segments have also been synchronized. This week, the price of M10 monocrystalline TOPCon battery cells dropped to 0.27-0.285 yuan/W, with a month-on-month decrease of about 6.5%, which is basically in line with the silicon wafer price reduction. The further decline in battery prices has affected the expectations of silicon wafer companies to stabilize prices and indicates that the bargaining power in the current silicon wafer segment is not strong.
Industry organization InfoLink pointed out that in the silicon wafer market, the dual pressures of rising silicon material prices and falling battery chip prices have made it relatively difficult in the four main industrial chain segments. Although the market has heard that leading companies have production reduction plans, the actual changes in operating rates are expected to become apparent in September, and the supply and demand relationship in August is still unstable. The trend of silicon wafer prices is still likely to decline.
Undoubtedly, the impact that the production reduction of major silicon wafer manufacturers may bring is a focal point of concern in the industry. In the past two weeks, silicon material prices have shown a slight upward trend. If the production reduction of major silicon wafer manufacturers is implemented, it will inevitably affect the demand for silicon materials, and whether the silicon material prices can continue to rise is also in question. Industry data has indeed confirmed this concern.
According to data from the Silicon Industry Branch, this week's polysilicon prices have remained stable across the board. Among them, the average transaction price of N-type rod-shaped silicon is 41,000 yuan/ton; the average transaction price of monocrystalline dense material is 34,300 yuan/ton; the average transaction price of N-type granular silicon is 36,700 yuan/ton.The Silicon Industry Branch pointed out that, from the perspective of polysilicon enterprises, there is currently a certain inventory of raw materials in downstream pulling crystal enterprises, and the work rate has been adjusted downward. Only some enterprises that maintain a high work rate and those with export product demand are more active in taking goods, and can accept a certain degree of price increase. The reason for the stable prices this week is, first, that the signing of orders for the month has come to an end for enterprises, and the market transactions are relatively limited; second, the expectation of pulling crystal production reduction in the downstream has intensified, and without further price increase by leading silicon material enterprises, most other enterprises are striving for flat price transactions.
Overall, the domestic polysilicon supply (including imports) is in a state of low and stable. In terms of demand during the same period, although there are increased demands such as hoarding by traders and restocking by downstream enterprises, the plan of some major silicon wafer factories to reduce the work rate to 70-80% will have a substantial impact on the current fragile supply and demand relationship.
InfoLink also mentioned that starting from the middle of this month, the move to reduce the pulling crystal efficiency by the silicon material usage side, especially some leading enterprises, is expected to have a certain impact on the market. If other professional silicon wafer factories also expect to reduce the pulling crystal efficiency in September, it will undoubtedly form a clear negative impact on the demand side of silicon material. In addition, there is an expectation in September that some silicon material enterprises will end maintenance, increase efficiency, and output, which may drive a slight rebound in the new supply volume from the bottom in September, and may bring a new round of upward pressure on the already significantly reduced supply side inventory, which will be even more unfavorable to the rebound momentum of the spot price of silicon material.
Regarding the price changes of other downstream links, InfoLink pointed out that recently, the price trend of battery chips mainly depends on the decline of component prices, and the battery chip link lacks sufficient bargaining power. Only players who can produce ultra-high efficiency battery chips can maintain bargaining power above the market level. The low price segment of battery prices is still exploring, and the current low efficiency battery chips and specific demand products, such as goods involving moving goods to offset accounts, have fallen to 0.27 yuan per watt and below.
As for the component link, there is no obvious sign of a significant rebound in demand, and the demand support point is that domestic large projects are about to be driven in August, and overseas demand is stable. There are fewer people who accept the upward exploration of quotations, and the market is still full of low price orders, low efficiency products, inventory goods, etc., which cause the price to explore down, continue to disrupt the market rhythm, and it is difficult for component prices to repair and rise.
The above analysis shows that although the reduction of production by major silicon wafer factories helps to alleviate market anxiety, the photovoltaic industry chain prices may still remain low in the short term. However, in the medium and long term, the industry attitude is relatively optimistic.
The Silicon Industry Branch pointed out that although the prices of silicon wafer and battery links have fallen, the leading enterprises' reduction in production is still a positive benefit for stabilizing the medium and long-term industry chain links. First-line enterprises reduce the load to establish confidence for the industry, and after experiencing a short-term selling pain period, the market supply and demand will be in a continuous upward trend in the medium and long term, and the price is also expected to stop falling gradually. In addition, currently, more than half of the inventory in the silicon wafer industry is concentrated in one or two enterprises, and the production plans of these enterprises will become the focus of market attention in the short term. In the medium and long term, as the capacity of each link in the industry chain is accelerated to clear out, the market price is also expected to return to a reasonable level.
Lu Jinbiao, deputy director of the Silicon Industry Expert Group of the China Nonferrous Metals Industry Association, talked about his judgment on the recent industry chain situation when he accepted an interview with a reporter. He believes that currently, the overall load of silicon wafers has not changed, and the key is that the growth of photovoltaic terminal demand is not much, leading to the loss of cash flow by integrated component manufacturers, who can only produce on demand and dare not press inventory. In addition, the inventory of silicon material itself is large, and it will not achieve balance at present, and it is necessary to continue to reduce the load to help improve the supply and demand relationship.
The reporter noticed that whether the silicon material price can stabilize affects the nerves of the industry chain. The industry insiders generally agree that if the silicon material price stabilizes at a reasonable level first, and the downstream link prices are adjusted accordingly, the entire industry chain may be able to make a profit again. In this regard, Lu Jinbiao said to the reporter that the silicon material price is far from the time to rebound, "I have been calling for the reduction of polysilicon load, but some large factories have different considerations, and now the downstream link hopes that polysilicon will rise, so that it can take the opportunity to rise to a non-loss situation."
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