TrendForce Reports Strong Downstream Demands Cause Spot Prices along PV Supply Chain to Rebound

The latest photovoltaic (PV) price update by EnergyTrend, a division of TrendForce, shows the downstream sector of the industry has been seeing brisk orders since the start of June. Stock up demands for this month also starts to pick up following this turnaround. 

“In China, domestically produced polysilicon has reached a low of 113~115 yuan RMB per kilogram in June because of the excess stock in the market,” said Angus Kao, analyst for EnergyTrend. “The import prices for polysilicon in China are actually lower and this causes additional price declines for domestic polysilicon. While the average selling price is still above production costs, manufacturers also have to contend with other costs, including inventory and operation. A huge pressure is on them because they cannot stay profitable unless they have achieved a sufficient scale of production.” 

Consequently, polysilicon manufacturers are considering investing in PV system projects in the downstream sector in order to expand the client base. Some companies plan to build ground-mounted systems on lands that are originally set aside for plant expansion. Others intend to create a power plant company in the second half of this year, so they can attract capital for PV power plant projects and capacity expansion of polysilicon. Numerous Chinese polysilicon manufacturers presently have a department dedicated to the development of PV power plants. All these indicate that controlling the end market has become more important than capacity expansion. 

Si wafer prices generally remained flat towards the end of May, but the situation has changed since June. Mono-Si manufacturers that have started to work on power plant projects in the downstream sector are seeing some early benefits. Their oversupply problem has been moderated, with the average price drop-off shrinking from 5.7% in the first quarter to about 1% in May. For the multi-Si wafer manufacturers, those at the first tier are better at filling their capacities and their priorities have been on supplying long-term clients. The second-tier manufacturers are raising their capacity utilization rates by both taking orders from the first-tier companies and spot trading. They generally are still having excess capacities, however, and multi-Si wafer prices are kept low as a result. On the whole, Si wafer manufacturers are reacting to the oversupply of polysilicon that caused price declines in the previous quarter. The slide in prices may be halted if the downstream sector are able to offer constant demands from June onwards. EnergyTrend estimates the average price of multi-Si wafers in June will be around US$0.80~0.81 per piece. 

In the downstream sector, the prices of high-efficiency multi-Si cells stopped their decline in mid-May and started to rebound at the beginning of June due to the market turnaround. Manufacturers at the first tier were the first to raise prices. Overall, the prices for PV cells are rising and the market will continue to grow stronger. The current upswing is due to the fact that the 260W modules are becoming more mainstream, and this spurs the demands for cells of higher efficiency. The arrival of the peak season also gives a boost to the entire market. According to EnergyTrend, the average price of high-efficiency multi-Si cells will increase to US$0.31~0.33 per watt in June. However, the actual prices among manufacturers are going to vary according to the quality of their products and tariff rates imposed by the U.S. 

The prices of modules have benefitted from the returning orders, and the first-tier manufacturers are fully loaded in their capacities. The capacity utilization levels for the second-tier companies are stabilizing owing to the orders from the first tier, though they also sell their own modules. The second-tier companies are also starting to expand into the system market because having more sales channels will ensure steady shipments. Before their plans fully realized, however, they still have to consider their present shipments and costs. The average module price therefore is expected to go up slightly by about 1%, a relatively moderate increase compared with other PV products.