TrendForce: PV Spot Price Slowly Increases with US$20/kg Being the Polysilicon Ceiling Price in the Short Run

EnergyTrend, a research division of TrendForce, indicates that the market is generally optimistic about the demand in 2014. But since subsidies have been cut significantly, the development for large-scale power plants is to be tested. Whether self-consumption segment can fill the gap in a short period of time has become critical to the continual market growth. “Supply adjustment will still be required in 2014 and the consolidation processes will also continue. Sales channels will be mostly handled by first-tier manufacturers and the impact on the spot market will be larger. Therefore, in 2014, the market will slowly grow, which will raise polysilicon price. But since China may cancel the government’s so-called “handbook”, US$20/kg may be the ceiling price for polysilicon manufacturers in the Short Run.

“If calculating based on the average polysilicon price of US$20/kg, wafer cost will reach US$1/piece-US$1.1/piece and cell cost will be US$0.38/watt-US$0.39/watt. As for modules, the cost will fall between US$0.57/watt-US$0.66/watt,” Hsu added. Although silicon wafer manufacturers have successfully revised the wafer price upward in 4Q13, it didn’t reach break-even point. Thus, 2014 will be an important year for manufacturers to achieve break-even status. EnergyTrend believes both wafer and cell manufacturers will try to target on US$1/piece.

In terms of cells, current average sales price has allowed manufacturers to turn around losses. In 2014, major manufacturers may continuously gain profit. For modules, product sales price is greatly affected by individual market. Thus, profit status for manufacturers will be different based on the composition of company clients. It’s projected that market price in 1Q14 will fluctuate but it will start to increase in 2Q14. Overall, EnergyTrend believes relevant manufacturers can continue to be profitable due to the stable demand growth in 2014.

Aside from the increased market price, what needs to be paid attention to is the supply and demand status of mono-si market. As indicated by EnergyTrend’s 2014 outlook report, the development of large-scale power plants is to be tested due to the substantial subsidy cut. It in turn affects the demand for normal-grade products. On the other hand, self-consumption segment may grow further in the future. Mono-si wafer manufacturers have started to expand capacity since the second half of 2013 and have completed the expansion plans in 4Q13 continually.  

As indicated by EnergyTrend’s investigation regarding the shipment for major cell manufacturers next year, the proportion of mono-si cells may represent more than 20%. Mono-si wafer demand will be about 9GW-13GW. Although mono-si wafer price has declined lately, EnergyTrend believes this is only temporarily caused by different supply and demand timing. If judging from the demand of 9GW-13GW in 2014, there may be slight supply shortage issue for mono-si wafer and price is likely to increase.

Judging from the spot market’s overall performance, average polysilicon price in China was close to RMB$140/kg. With suppliers turning tougher towards the spot price, last week’s price continued to increase and average price came to US$17.515/kg, a 0.82% rise. For multi-si wafers, first-tier manufacturers have revised relevant product price upward. Also, manufacturers kept raising the price because they have received quite a few orders already, which led to the increased spot price. Last week’s average price reached US$0.915/piece, a 0.11% rise. For mono-si wafers, demand was still turning weak and last week’s average price dropped to US$1.159/piece, a 0.09% drop. For cells and modules, the utilization rate for first-tier manufacturers remained high. There were no significant market change, thus, last week’s price remained flat.