Polysilicon Inventory Buildings Temper Corrections

April 24, 2019

Polysilicon prices stabilize this week, as the oversupply situation in China temporarily ceases amid the supply control by the inventory buildings of major Chinese suppliers. However, since the current price levels are still good enough to cover cash costs, lots of Korean suppliers suffering from high cash costs of polysilicon made in Korea are retrieving their production back. Meanwhile, although the supply of polysilicon in China is increasing with notable rate as triggered by the extensive capacity expansion plans of major Chinese polysilicon manufacturers, major Chinese suppliers are now building up their inventories levels to prevent from the further seriously price correction. On the other hand, since major polysilicon buyers also follow their demand to place the orders regularly, the steady polysilicon demand seems to be balanced by the supply control this week.

Multi-crystalline wafer price remains the downtrend this week, as slow demand in China and India sustains and some Chinese multi-crystalline wafer suppliers keep their production rates fully in April. On the other hand, mono-crystalline wafer prices head south slightly this week since the second tier players have to cut their price lower than the largest supplier, as it keeps their price quotes as the lowest one for May. However, without the demand improvement in China, the expensive mono-crystalline wafer prices and mono-crystalline PERC cell prices restrict mono-crystalline wafer from any further demand improvement. Meanwhile, one major Chinese mono-crystalline wafer supplier keeps building their ingot inventories over one month, since its sales head believes mono-crystalline wafer demand will be strong enough to be under shortage in the coming months.

Multi-crystalline cell price is steady this week as major Chinese buyers are back to their normal procurements to fulfill their downstream orders. Due to the traditional slow season in India, major Indian multi-crystalline cell buyers keep trying to cut their purchasing orders or asking prices, but multi-crystalline cell makers intend to pile up their inventory levels, instead of the price reductions. On the other hand, mono-crystalline PERC cell prices stay immobile this week as major buyers are back to their normal procurements, even as the current prices are still too expensive. However, as mono-crystalline PERC cell price continues to be unaffordable, major cell buyers alter their strategies to shift part of production to multi-crystalline ones, in order to further drive the prices down.

Solar panel prices perform stable this week as the effects of supply constraint and slow demand continues to reverberate. In China, India, and Japan, even as the demand in these regions remains sluggish, benefited by global exposures, major Chinese suppliers are able to have the solid orders from the other regions without the serious competition. In the US, since the demand is relatively solid, solar panel prices are stable as Chinese module makers are not able to fuel enough supply made in out of China. In Europe, major buyers are still looking for more supply on mono-crystalline PERC module, but major Chinese suppliers would like to take the orders under their in-house supply, since the current outsourcing manufacturing is too costly to make any profit under the current solar panel price quotes which the project developers can be affordable under their acceptable IRR.

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