Silicon Wafers Slightly Cut Prices in Photovoltaic Industry Chain

photovoltaic "double male" continuously lowered the price of silicon wafers. On November 24, photovoltaic leader Longji Green Energy (601012.SH) announced a reduction in the price of some silicon wafers. 3 days later, TCL Central (002129.SZ) followed closely and announced another cut in silicon wafer prices on October 31.

the latest data from the Silicon Branch of China Nonferrous Metals Industry Association (hereinafter referred to as the Silicon Branch) shows that under the background of reducing costs and increasing efficiency of crystalline silicon photovoltaic, monocrystalline silicon wafers continue the trend of large size and flakes, and the price decline is further expanded. On the one hand, oversupply leads to inventory overlay; on the other hand, there are clear signs of weakening domestic demand.

at the China Photovoltaic Industry Annual Conference and Photovoltaic High-quality Development Summit Forum held on December 1, Wang Bohua, Honorary Chairman of the China Photovoltaic Industry Association, said that relevant departments have intervened in the issue of price increases in the industrial chain that has received widespread attention this year. Recently, silicon wafers have begun to reduce prices, silicon prices are relatively stable, and industrial chain prices have fallen across the board. Although the range is not very large, it is a beginning.

silicon wafer prices begin to fall

, the supply chain price of photovoltaic industry continued to rise.

the latest data from the China Photovoltaic Industry Association show that from January to November 2022, the price of monocrystalline silicon rose 31.30% from the beginning of the year; the price of silicon wafers rose 24.84% from the beginning of the year; the price of battery chips rose 26.41% from the beginning of the year; and the price of components rose 4.45% from the beginning of the year.

, the three ministries and commissions jointly issued the Notice on Promoting the Coordinated Development of the Supply Chain of the Photovoltaic Industry Chain. On October 28, the two ministries and commissions issued the Notice on Matters Related to Promoting the Healthy Development of Photovoltaic Industry Chain. The intervention of relevant departments has further stabilized the price of photovoltaic industry chain.

On November 24, Longji Green Energy lowered the price of silicon wafers. Among them, the thickness of P-type M10155μm (182/247mm) decreased from the previous 7.54 yuan/piece to 7.42 yuan/piece, with a decrease of 1.6%. For this round of why the price of some silicon wafers was lowered, the relevant person in charge of Longji Green Energy said, "In the high level of silicon prices, Longji Green Energy purchases upstream silicon materials with sales and fixed production to prevent and control risks. The reduction is mainly the loosening of upstream silicon prices."

data show that cells account for about 67.5% of the cost of photovoltaic modules. The main raw material of cells is silicon wafers, and silicon materials account for about 60% of the cost of silicon wafers. Since the beginning of this year, the mismatch between supply and demand has led to a continuous rise in silicon prices, which has also led to a simultaneous rise in silicon prices.

According to the statistics of the Silicon Industry Branch, the output of silicon wafers in China increased to 36.1GW in November, up 7.76% from the previous month. Among them, the output of monocrystalline silicon wafers increased to 35.3GW, up 7.95% from the previous month, while the output of polysilicon wafers remained at 0.8GW, flat from the previous month. The growth rate of silicon wafer production is in line with expectations. Based on the situation at both ends of supply and demand, the situation of oversupply will not change in the short term. Therefore, silicon wafer prices are expected to maintain a downward trend.

oversupply, silicon prices fell or continued to expand. Silicon industry branch data show that under the background of silicon photovoltaic cost reduction and efficiency enhancement, monocrystalline silicon wafers continue the trend of large size and flakes. M6 monocrystalline silicon wafers have been quoted from 160 μm to 155 μm since last week (November 28-December 2). Among them, M6 monocrystalline silicon wafer (166mm/155 μm) fell 0.64% week-on-week; M10 monocrystalline silicon wafer (182mm/150 μm) fell 3.37% week-on-week; G12 monocrystalline silicon wafer (210mm/150 μm) fell 4.53% week-on-week.

into December, with the release of new silicon production capacity, silicon materials, silicon wafer prices or linkage reduction. "The decline in silicon prices has expanded, and it is expected that silicon prices will continue to explore in December. The continued increase in upstream silicon supply is the main reason why prices have begun to decline. With the further release of new silicon production capacity, it is expected that the scale of silicon production in December will increase to 103,000 tons month-on-month, corresponding to the supply of components of about 39GW, and the price of silicon in December may continue to explore." Bank of China International Power Equipment Securities analyst Li Korun predicted.

industrial chain prices may gradually fall

with the decline in the price of silicon materials and silicon wafers, the upstream of photovoltaics may officially enter the price reduction channel.

on December 2, Tianfeng Securities predicted that, as a bottleneck in the photovoltaic manufacturing industry, with the release of silicon production capacity to drive prices down, photovoltaic upstream is expected to officially enter the price reduction channel. Open Source Securities predicts that with the release of silicon production capacity supply and demand has been greatly eased, the price of the industrial chain is expected to gradually fall.

component profitability is expected to be repaired. "Component processing profits have continued to be under pressure this year, and industry profits are generally thin. We believe that the cost pressure of silicon materials to reduce the release of overlay terminal demand, is expected to support the component link processing profit repair to historical normal levels. In addition, the current signing price of components is still at a high level, and next year's signing orders are mostly in the form of long orders to stabilize cost fluctuations, in the upstream silicon material price reduction process, there is room for futures profit cashing in the component link. According to PV InfoLink data, the price of 500W + single glass components will remain at 1.9-1.93 yuan/W in the first quarter of 2023, while overseas prices will still be above US $0.245/W." Li Kolun Analysis.

battery prices will also change, and earnings are expected to continue to improve. According to Longji Green Energy, at present, the main market demand for battery chips comes from the domestic market. In order to complete the installation task by the end of this year, downstream enterprises have promoted the growth of demand in China's terminal market, which has led to tight battery supply. With changes in market supply and demand, battery prices are expected to change accordingly, and the entire industry chain has entered a price sensitive period.

With the gradual lifting of the bottleneck in the supply of silicon materials, the profits of the industrial chain will be transferred from the upstream to the downstream, and the battery chip and component links are expected to benefit from the redistribution of profits in the industrial chain. Guolian Securities analysis, under the long-term target, photovoltaic downstream gross margin will be higher, industrial chain profits return to the traditional manufacturing "concave" distribution, integrated enterprises are expected to continue to benefit. At the same time, the decline in silicon prices will drive the rapid growth of ground centralized power stations, glass, film, brackets, silver pulp, target materials and other auxiliary materials will continue to benefit.

market demand drives the strong growth of the manufacturing side, more and more specialized and new enterprises are pouring into the photovoltaic industry, showing a growth trend year by year. As of November 2022, 87 companies have won the title of "Specialized and New. These specialized and special new enterprises are mainly distributed in the fields of battery cells, inverters, junction boxes, equipment manufacturers, photovoltaic glass, EVA, packaging materials, etc.

domestic enterprises to expand production hot. According to incomplete statistics, from the beginning of 2021 to November 2022, China's photovoltaic planning expansion projects more than 480, some of which are phased construction. The regionalization of production expansion is becoming more and more obvious. Among them, industrial silicon, silicon materials, silicon rods/silicon wafers and other upstream links are mainly concentrated in Inner Mongolia, Qinghai, Xinjiang, Ningxia, Sichuan, Yunnan and other central and western provinces, and downstream links such as battery chips and components are mainly concentrated in Jiangsu, Zhejiang and Anhui. Three eastern coastal provinces.

"The entry of cross-border enterprises into the manufacturing side will promote the flourishing of photovoltaic technology and stimulate traditional photovoltaic enterprises to accelerate technological iteration. It will bring new business models to photovoltaic enterprises and make the industry more dynamic. However, the challenge is that there may be low-level duplication of construction in the industry, and there is a risk of overcapacity in some links. The entry of central state-owned enterprises into the manufacturing side has further intensified market competition, and the overall development cost has been continuously reduced. Its capital injection is bringing new vitality to the development of the industry." Wang Bohua reminded.