Strong Price Support Signals Stability in the Photovoltaic Supply Chain

Strong Price Support from Manufacturers! Prices in the Photovoltaic Industry Chain Temporarily Stabilize

The prices in the photovoltaic industry chain have shown signs of stabilization after several weeks of decline. According to data released by the Silicon Branch of the China Nonferrous Metals Industry Association, the price of polysilicon remained steady this week, with the average transaction price for N-type re-investment materials at 38,600 RMB/ton, for N-type granular silicon at 36,000 RMB/ton, and for P-type polysilicon at 31,300 RMB/ton. However, the overall transaction volume of polysilicon was relatively low this week. Given the recent market trends and company movements, the Silicon Branch anticipates a trend of stabilization in polysilicon prices.

Since the beginning of this month, some polysilicon manufacturers have resumed production stoppages or maintenance, reflecting a risk-averse behavior amid extreme market conditions, indicating that prices have reached a level where companies can no longer tolerate losses. Additionally, with the rainy season approaching, it is expected that there will be no new plans for restarting production this year, with any production adjustments likely being capacity replacements or small capacity substitutions for larger ones. A significant reduction in supply could help alleviate the current mismatch between supply and demand, easing pressure on the industry and companies.

Industry consultancy InfoLink noted that current strategies among silicon material manufacturers are primarily focused on stabilizing prices. Companies are currently assessing their production reduction strategies, with only a few confirming their maintenance plans. Most manufacturers do not plan to increase production, and major production reductions are expected to occur around June to August, coinciding with a period of weak end-user demand. Some manufacturers are also considering their substantial inventory levels and leaning towards capacity replacement strategies to maintain production throughout the year.

Similar to silicon materials, silicon wafer prices have also shown signs of temporary stabilization. Specifically, the average transaction price for N-type G10L monocrystalline silicon wafers is 0.95 RMB/piece, N-type G12R monocrystalline wafers at 1.10 RMB/piece, and N-type G12 monocrystalline wafers at 1.30 RMB/piece, all remaining stable month-on-month. Notably, this week saw a significant increase in trading volume, leading to a noticeable decrease in silicon wafer inventory.

The Silicon Branch indicated that following a substantial drop in silicon wafer prices, downstream demand has shown a higher acceptance of current prices, resulting in an increase in purchasing orders for silicon wafers. At the same time, under cost pressures, suppliers are strongly inclined to maintain prices, and some companies have a strong willingness to reduce production to stabilize prices. With reduced inventory, stable demand, manufacturers’ price support, and expectations of lower supply, silicon wafer prices are expected to hold steady.

Data shows that the overall operating rate in the silicon wafer industry is around 55% this week. Among the leading companies, the operating rates are 50% and 56%, while integrated companies operate between 56% and 80%. Other manufacturers have operating rates between 55% and 80%, and silicon wafer inventory has decreased to about a 10-day supply.

Looking ahead, the Silicon Branch has pointed out that due to a lack of significant recovery in end-user demand, the probability of a rebound in silicon wafer prices in the short term is relatively low. The photovoltaic industry remains in an adjustment phase, with changes in silicon material and battery prices being crucial factors influencing the trend of silicon wafer prices. If silicon material and battery prices stabilize in the future, silicon wafer prices may follow suit.

According to InfoLink, although silicon wafer prices temporarily stabilized this week, the overall market sentiment remains cautious. In particular, the lack of a clear recovery in end-user demand means there are insufficient supporting factors for price rebounds, leading to a relatively low likelihood of substantial price increases in the short term. Moreover, the supply chain is still undergoing adjustments, making the future trends of silicon material and battery prices key areas for observation.

The agency also mentioned that upstream manufacturers are gradually implementing production reduction plans. If the execution of these plans intensifies and the pace of inventory reduction accelerates, it will contribute to further stabilizing market prices. Whether silicon wafer prices can continue to stabilize or even rise will depend on the actual reduction levels in June and the recovery of demand.

In the battery segment, it was the only part of the industry chain to see a slight price decline this week. The average prices for 183N and 210N battery cells dropped to 0.255 RMB/W and 0.275 RMB/W, respectively, reflecting a decline of about 2%. The price of the 210RN battery cell remained stable at 0.265 RMB/W.

According to feedback from some battery cell manufacturers, the 183N cells are experiencing sustained weak demand, with module manufacturers showing a low willingness to accept the current average price, which may lead to further declines in transaction prices to 0.25 RMB/W. Additionally, the 210R battery cells maintained stable pricing due to support from leading manufacturers last week.

InfoLink believes that several battery cell manufacturers have already begun to implement production reductions by the end of May. Given that recent market prices are closely tied to production costs, manufacturers may find it challenging to sustain these prices in the long term, especially as market expectations for weaker end-user demand in June persist. The eventual recovery of battery cell prices will depend on the actual execution of production cuts in June.

Turning to the module segment, with the supply chain nearing a bottoming out, some manufacturers are struggling to fulfill previous low-price orders at 0.65 RMB/W. Previously aggressive manufacturers are also beginning to adjust their strategies. In the module sector, leading manufacturers have set new single prices for TOPCon modules at around 0.65 RMB/W to 0.66 RMB/W. Due to the effects of production cuts, there are renewed supply shortages for some popular models, with recent spot prices for new orders ranging between 0.67 RMB/W and 0.72 RMB/W.

InfoLink observes that in terms of demand, early May saw demand primarily driven by leftover projects; however, by late May, demand support remains relatively weak, and market uncertainty is high. It could remain sluggish until July or August, and adjustments in manufacturers’ strategies will influence whether subsequent prices can achieve effective support.