New production capacity of silicon materials continues to be released

The price of silicon material has dropped for five consecutive weeks this week, but the market was not surprised. A supply chain analyst told Caixin Media that currently, downstream demand is improving, but the supply of silicon material is sufficient. It is only a matter of time before the price of silicon material returns below 200,000 yuan per ton. Another person from a silicon material enterprise said that the current production and operation are normal. The signing of orders for the second quarter is underway, and the price of silicon material fluctuates normally according to the downstream demand.

According to the latest information from the Silicon Wafer Industry Branch, the decline in silicon material prices has further expanded this week. The domestic monocrystalline reinput material price range this week was 204,000-210,000 yuan per ton, with an average transaction price of 208,800 yuan per ton, a week-on-week decline of 4.31%. The price range of single crystal dense material was 202,000-208,000 yuan per ton, with an average transaction price of 206,700 yuan per ton, representing a week-on-week decrease of 4.39%.

However, according to institutional price monitoring, the actual transaction price of polysilicon is even lower. Information from Shanghai Metals Network shows that the prices of polysilicon cauliflower material and granular silicon have dropped below 200,000 yuan per ton, and the polysilicon price index is 199.83 yuan per kilogram. Some major factories are intent on adhering to the lower limit of 200 yuan per kilogram, but the overall recognition of crystal pulling factories is not high.

Since the beginning of this year, the photovoltaic cell industry chain has been engaged in continuous price competition over polysilicon. However, despite the stable growth of its output, the transaction price has continued to decline this month. According to statistics from the Silicon Industry Branch, in the first quarter of this year, domestic polysilicon output reached a total of 304,000 tons, representing a year-on-year increase of 91.2%.

The reporter from Caixin noticed that as more new production capacity continues to be released in the second quarter, there is a strong expectation that the price of silicon material will further decline. According to SMM's forecast, domestic polysilicon supply is expected to reach 350,000 to 360,000 tons in the second quarter. Among them, the projects that have drawn more market attention mainly include the first phase of Hesheng Silicon Industry, the first phase of Xinjiang Xinte, and the first phase of Yongxiang, etc.

However, industry analysts also say it is difficult to predict the future trend of silicon wafer prices. In fact, as domestic projects started to increase in volume one after another from the second quarter, the demand for components has picked up. At that time, the number of silicon material orders signed will increase, which is expected to continue to provide price support. Therefore, the price game between upstream and downstream will continue for some time.

A responsible person from Daqo New Energy (688303.SH) stated at the recent performance briefing that the logic of supply and demand determining prices has not changed. Therefore, this year's prices will depend on the growth in demand for terminal photovoltaic installations and the capacity release of existing manufacturers and new entrants. Both of these factors are uncertain.

The price of silicon material has declined, and the price transmission effect is obvious. After the cost pressure is relieved, the component end is also simultaneously passing on benefits to power stations. According to the bid opening results of the 2023 centralized procurement of photovoltaic module equipment recently announced by China Nuclear Hui Neng, the quotations are mainly concentrated between 1.6 and 1.7 yuan /W, among which the average bid price of P-type is approximately 1.66 yuan /W, and the average bid price of N-type TOPCon is 1.728 yuan /W.

According to the benefit calculation, when the component price is below 1.8 yuan /W, the enthusiasm for terminal installation recovers. Daqo New Energy expressed full confidence in the long-term development of the photovoltaic industry. According to institutional predictions, the global new installed capacity of photovoltaic power is expected to exceed 350GW in 2023, with a growth rate likely to exceed 50%.