Continuous Decline in Polysilicon and Wafer Prices Signals Delayed Recovery for Solar Market

Infolink Consulting has reported ongoing declines in polysilicon and wafer prices. 

The continuous decline in polysilicon and wafer prices signals challenging times ahead for the solar industry, particularly in China. Manufacturers are facing the dual pressures of maintaining production amid falling prices and managing rising inventory levels. The market's varied pricing strategies reflect a struggle between securing profitability and maintaining market share, leading to a competitive and uncertain landscape.

Polysilicon Prices Reach Critical Lows

After the Labor Day holiday, polysilicon prices continued their descent, with rates now between RMB 40-46/kg for polysilicon chunks and RMB 38-41/kg for granular polysilicon. Although the rate of decline is slowing, the prices have fallen below the industry's production cost threshold, raising concerns about operational viability. 

Manufacturers are contemplating production cuts and early maintenance schedules to manage costs, while new production capacities from leading manufacturers are gradually being introduced, balancing out the reductions. However, this equilibrium might be short-lived as inventory levels are expected to rise in the second and third quarters, increasing sales pressure.

Wafer Prices and Production Remain Volatile

Wafer production remained stable in May at approximately 66 GW, with vertical integrators slightly reducing output while Tier-2 and Tier-3 manufacturers increased production. However, the growth in n-type wafer production has lost momentum, decreasing by 1 percent to 74 percent. Wafer prices have continued to fall, with p-type M10 and G12 wafers now trading at RMB 1.55-1.6/piece and RMB 2-2.1/piece, respectively. N-type wafers also saw price drops, with M10, G12, and G12R formats each experiencing a 4-7 percent decline.

Manufacturers are adopting various pricing strategies, leading to a widening price gap and creating a prisoner's dilemma within the industry. This competitive environment is likely to persist, with further price reductions anticipated as major companies consider updating their price quotes.

Cell Production and Prices Reflect Market Uncertainty

Cell production rebounded to 67 GW in April, with expectations to maintain around 68 GW in May. The share of n-type cell production is rising, from 68 percent to 72 percent, amid a phase-out of p-type cells. Cell prices have continued their slow decline, with p-type M10 cells now at RMB 0.32-0.34/W and G12 cells at RMB 0.35/W. N-type M10 cell prices fell to RMB 0.37-0.38/W, while the price gap between TOPCon and PERC M10 cells remained at RMB 0.03-0.06/W. HJT G12 high-efficiency cells were priced between RMB 0.55-0.65/W.

InfoLink’s forthcoming weekly spot price update will include TOPCon G12 and G12R cell prices, currently at RMB 0.39-0.4/W and RMB 0.4-0.42/W, respectively.

Steady Module Production Amid Price Fluctuations

Module production is expected to remain stable through May and June. Tier-1 manufacturers are maintaining production due to consistent order inflows, while some Tier-2 and Tier-3 manufacturers are considering raising production plans or regulating operations to sustain activity. May orders have been steady, driven mainly by the Chinese market, with centralized procurement projects leading deliveries at RMB 0.88-0.92/W for TOPCon modules. Distributed-generation project orders ranged from RMB 0.85-0.93/W, though some low-priced orders have pushed prices below production costs, leading to project postponements.

Delivery prices for centralized procurement projects in the second half of 2024 are expected to settle around RMB 0.8-0.82/W. Prices for 182mm PERC glass-glass modules ranged from RMB 0.78-0.90/W this week, with notable decreases in China towards RMB 0.83-0.85/W. HJT module prices averaged RMB 1.1/W, with the low-price range falling below RMB 1/W.

In international markets, PERC module prices stabilized at USD 0.1-0.11/W, with European prices slipping to EUR 0.10-0.11/W. TOPCon module prices varied by region, sitting at EUR 0.12-0.13/W in Europe, USD 0.12-0.13/W in Australia, and USD 0.11-0.12/W in Brazil and the Middle East. HJT module prices stabilized at USD 0.13-0.15/W.

The US market saw fewer orders for the second quarter, with prices holding at USD 0.33-0.35/W. Trade policy disruptions have led some Southeast Asian module makers to suspend price quotes for 2025.