In the first half of this year, the prices of silicon materials and wafers in the upstream of the industrial chain have risen one after another, putting greater pressure on mid- and downstream companies. The stabilized prices of silicon materials indicate that the contradiction between the upstream and downstream of the industrial chain has eased. The 21st Century Business Herald reporter also noticed that recently, the price of silicon wafers announced by Zhonghuan (002129), a supplier of monocrystalline silicon wafers, in June was also lower than a month ago.
“With the commissioning of new silicon wafer production capacity, the price of silicon wafers may fall in the short term. However, whether it can eventually be transmitted to more upstream silicon materials, which will cause the price of silicon materials to fall, may still be difficult.” One person is reluctant. The named new energy industry analyst told the 21st Century Business Herald reporter that it is worthy of affirmation that the previous fierce industry chain game situation is breaking.
Silicon material prices stabilized at high levels for two consecutive weeks
The price data released by the Silicon Industry Branch shows that this week, the domestic single crystal compound feed price range is 208,000-22.1 million yuan/ton, and the average transaction price remains unchanged at 217,200 yuan/ton; the single crystal dense material price range is 20.5-21.9 RMB 10,000/ton, the average transaction price remained unchanged at RMB 213,400/ton.
The analysis of the Silicon Industry Branch pointed out that there are three reasons for the continued stable operation of silicon material prices this week: First, as of this Wednesday, the polysilicon companies have not signed long-term orders for July, and they still focus on the implementation of pre-orders, with only a small amount. Loose orders and urgent orders are traded, and the price of replenishment orders remains stable before the market trend is not finalized. Second, the operating rate of first-line silicon wafer companies has decreased, which has caused the impact of the reduced production to gradually transition from excess demand to the balance point of supply and demand. The shortage of supply has been greatly eased, and the price of silicon wafers from major tier-one manufacturers has begun to decline, making it difficult for polysilicon prices to continue the upward trend. Third, in late June, new silicon wafer production capacity such as Beijing Express, Gaojing, and Hongyuan have been completed and put into production, and demand for silicon materials has increased. As well as the expectation of stable supply, it is also difficult for polysilicon prices to enter the downward channel instantly.
The last price increase of domestic polysilicon materials was half a month ago. In the week of June 16, the average domestic single crystal double-investment material transaction price and the single crystal dense material average transaction price were fixed at 217,200 yuan/ton and 213,400 yuan/ton, respectively. In the current week, the price increase of polysilicon materials continued to narrow.
The 21st Century Business Herald reporter learned that as downstream manufacturers adjust the operating rate and other methods, to change the current tight supply and demand imbalance of silicon materials. In terms of actual effects, after the demand for the reduced production part was suspended, the supply-demand relationship of silicon materials showed an inflection point, which temporarily slowed the trend of continued rise in silicon material prices.
In the first half of this year, the contradiction between the upstream and downstream of the domestic photovoltaic industry chain was officially made public with the release of a company’s report materials. On June 9, the China Photovoltaic Industry Association organized a symposium on hot and difficult issues in the photovoltaic industry. At the meeting, battery cell manufacturer Aixu Group criticized the phenomenon of irrational rise in the price of domestic silicon materials, and suggested that relevant state departments intervene in investigations and interview the companies involved.
Subsequently, for this symposium, the China Photovoltaic Industry Association issued a document calling for companies to “consciously resist excessive stockpiling of polysilicon and silicon wafer products, news about price drive ups, and speculative behaviors that do not require their own production and operation. Consciously resist cell modules.” The misbehavior of malicious competition, such as low-price dumping at the link, brought the price of silicon materials back to the normal range as soon as possible, and jointly promoted the healthy and sustainable development of the industry.”
Taking this event as a turning point, the price of domestic polysilicon materials subsequently narrowed their growth rate and entered a stable operation channel at a high level.
However, the industry is not optimistic about whether the price of silicon materials can be reduced accordingly. “Although the downstream measures to reduce purchases and reduce operating rates have forced silicon materials to stop rising, and have achieved certain results, the current shortage of silicon materials has not been substantially reversed.” The aforementioned analyst told the 21st Century Business Herald reporter. , It is even more impractical to expect to drop to last year’s level.
The newly released research report of China Everbright Securities also pointed out that there is a certain probability that the silicon material quotations in July will decrease due to the actual demand decline and bottom-up transmission. However, after the installation demand is expected to be repaired, the new and old production capacity of silicon wafers will be superimposed on the window period. The overall demand for silicon materials is still relatively strong, and the room for silicon material prices to fall is limited.
Zheshang Securities speculates that “silicon material prices may stabilize at a high level and stop rising”. “At present, it seems that silicon materials do not have inventory pressure. Therefore, price adjustments on the silicon wafer end will not be transmitted to the silicon material end too soon. It is expected that the price may remain stable at the current high level for the time being.”
Wafer prices may start a short-term decline
On the evening of June 29, Zhonghuan issued a price announcement for monocrystalline silicon wafers in June, which signaled a price cut.
The price shows that among the 170μm-thick silicon wafer products, G12 is 7.53 yuan/piece, M6 is 4.72 yuan/piece, and M1 is 4.62 yuan/piece. Compared with the last published price on May 31, the prices of G12, M6, and G1 with a thickness of 170μm were lowered by 8.4%, 9.55%, and 9.74%, respectively. In response to the reason for the adjustment of the silicon wafer quotation this time, Zhonghuan explained that “the recent global photovoltaic module installed capacity is weak, and the cost of downstream cells and modules is high.” In an interview with the media, a relevant person in Zhonghuan said that if the price of the industrial chain continues to remain high, the target for downstream installations may be lowered.
According to data released by the National Energy Administration a few days ago, as of the end of May this year, the installed capacity of solar power generation was 260 million kilowatts, a year-on-year increase of 24.7%. Compared with last year’s 250 million kilowatts of installed capacity data, it means that in the first five months of this year, the newly installed capacity of domestic photovoltaics was only less than 10GW. A few days ago, industry organization IHS Markit predicted that China’s new photovoltaic installations this year would be 61GW. In contrast, the current domestic construction of new photovoltaic installations has slowed down.
However, the domestic photovoltaic market is not short of incremental space. Recently, in order to accelerate the development of rooftop distributed photovoltaics, the National Energy Administration issued the “Notice on Reporting the Pilot Program for the Development of Rooftop Distributed Photovoltaics in the Whole County (City, District)” (hereinafter referred to as the “Notice”), which opened a new Trillion market size.
According to the “Notice”, the total roof area of the party and government organs in the pilot counties (cities, districts) of the project application can be installed with photovoltaic power generation; the total roof area of public buildings such as schools, hospitals, and village committees can be installed with photovoltaic power generation The proportion is not less than 40%; the total roof area of industrial and commercial plants can be installed with photovoltaic power generation proportion not less than 30%; the total roof area of rural residents can be installed with photovoltaic power generation proportion not less than 20%.
CITIC Securities estimates that the domestic market for household photovoltaics exceeds 1 trillion yuan. According to the agency, according to the current domestic rural housing sites with about 100 million self-built roofs, 50% of which can be developed, and household installed capacity of 5-10KW, the potential market size of domestic household photovoltaic typical scenarios is about 250-500GW, but it has The development scale accounts for only about 10%. In addition, according to Soochow Securities’ calculations, assuming that the whole country is a pilot, according to the requirements of the pilot, the total total space of distributed photovoltaic on the roof of the country exceeds 600GW.
With the strong market demand prospects, the industry chain has entered the market. Take the silicon wafer link as an example. Since last year, companies such as Beijing Express, Gaojing, and Hongyuan have aggressively deployed the monocrystalline silicon wafer field, which has greatly increased the production capacity of this link.
A reporter from the 21st Century Business Herald learned that recently, the new silicon wafer production capacity of the above-mentioned companies is being put into production one after another, and the supply of silicon wafers has increased. Among them, Gaojing’s 15GW silicon wafer project was officially put into production on June 18, and Jingyuntong’s 12GW silicon wafer project was ignited and put into production on June 23.
Reprint indicated source：Spark Global Limited information