Weekly Solar Market Price Trends: Mainland China Report 10

Solarzoom Solar Market Report Sept 24-Sept 8, 2012

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Silicon material

Last week, prior to the National Day Holiday, the domestic market price of level-1 material was 135 CNY/kg, and 132 CNY/kg for level-2 ones. The main price of the imported level-1 materials was $19.544 /kg, while it was $18.87 /kg for level-2 ones.
In the early part of the week, the price had a consolidation at the bottom. However, when the turnover got gloomier, some silicon material traders chose to expand shipments to improve their liquidity and avoid the adjustment of the price after the holiday. This action caused the price to decline. Since most manufacturers had shutdowns in advance prior to the holidays, the market quotation is not going to last. It is expected that the price will probably fall slightly after the holidays.

Wafer

The price of mono-c-Si 125mm*125mm wafer from tier-1 suppliers stood at 5.0 CNY/pc, and 4.5 CNY/pc for tier-2 ones. Mono-c-Si 156mm*156mm wafer had a price at 8.0 CNY/pc for tier-1 suppliers and 7.5 CNY/PC for tier-2 ones. In terms of poly-c-Si 156mm*156mm wafer, the price of tier-1 supplier reached 6.9 CNY/pc, and 6.4 CNY/pc for tier-2 ones. 

The gross margins are gone for wafer manufacturers. After the EU’s anti-dumping investigation started, those who previously shut down wafer manufacturing chose to withdraw from the solar market through reselling their equipment and factories. More and more enterprises shut down this week, and some of them withdrew from the market and even went bankrupt. Specific tier-1 manufacturers closed part of their factories in some regions, and some large-scale manufacturers planned to stop their production to consume their inventories in October. Now, the present wafer circulation volume of Grade A wafers can only maintain few orders from regular clients, and the demand for Grade B wafers is also diminishing. Some traders are beginning to transfer their attention to other business. Affected by the slack demand, the utilization of China’s cell manufacturers has been lower than 50%, and the average is about 20%. The utilization of most wafer manufacturers is lower than 40% at the moment. In addition, considering the financial strain and poor liquidity, many manufacturers have to pay debt with their products. At present, there is a large volume of cheap inventory from large-scale manufacturers circulating in the market. Recently, there are rumors about domestic policies and the future of the market.

Cell

Currently, considering mono-c-Si 125mm*125mm cell, the price of tier-1 suppliers stood at 3.1 CNY/W, and 2.5 CNY/W for tier-2 ones. Regarding mono-c-Si cell 156mm*156mm, the price of tier-1 suppliers arrived at 3.2 CNY/W, and 2.7 CNY/W for tier-2 ones. And, in terms of poly-c-Si cell 156mm*156mm, the price of tier-1 suppliers reached 2.7 CNY/W, and 2.4 CNY/W for tier-2 ones.

The price of cell remained stable this week. The EU’s anti-dumping investigation has been ongoing for two weeks and manufacturers began to reduce their underselling of modules in European ports. This week, many module manufacturers shut down, which caused the utilization of cells firms to remain very low, and most cell manufacturers are focusing on clearing their inventories. What’s more, since both Mid-Autumn Festival and National Day are near, most enterprises have stopped production and their quotation remains stable. Some manufacturers have shut down for the holidays in advance, so the market prices have no obvious movement.

Module

Now, concerning mono-c-Si module 190W, the price of tier-1 suppliers stood at 4.45 CNY/W, and 4.0 CNY/W for tier-2 ones. Concerning mono-c-Si module 195W, the price of tier-1 suppliers stood at 4.55 CNY/W, and 4.1 CNY/W for tier-2 ones. For mono-c-Si module 245W, the price of tier-1 suppliers arrived at 5.1 CNY/W, and 4.65 CNY/W for tier-2 ones. As to mono-c-Si module 250W，the price of tier-1 suppliers arrived at 5.20 CNY/W, and 4.8 CNY/W for tier-2 ones. And, in terms of poly-c-Si module 230W, the price of tier-1 suppliers reached 4.2 CNY/W, and 3.7 CNY/W for tier-2 ones. In terms of poly-c-Si module 240W, the price of tier-1 suppliers reached 4.45 CNY/W and 4.05 CNY/W for tier- 2 ones.

Due to the coming holidays, the quotation was stable this week. For the majority of manufacturers, the market price has been lower than the production cost. Under such a sluggish situation, some have decided to withdraw from the solar market. Some domestic manufacturers who have no inventories are expected to ship to Europe with small batches, but they usually require the payment of COD to avoid the risk in operation. Some manufacturers who have some rush orders plan to have overtime work during the holiday since they worry that the price will have a further decline after the holidays, and they are also anxious about potentially losing those orders. From looking at the domestic market, most manufacturers are seeking a new commercial model and some large-scale firms are focusing on investing and exploring power plants. At the same time, some small and medium manufacturers are also beginning to transfer their business to application system products. Production shutdowns and utilization reductions are expected to remain in place until inventory is cleared out. The market price is expected to fluctuate further after the holiday.  

 

Tier-one companies include the U.S. and HK stock market-listed entities, with large capacity and product circulation in the market, like Suntech Power Holdings Co., Ltd. (ADR)(NYSE:STP), Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE: YGE), Canadian Solar Inc. (NASDAQ: CSIQ), Trina Solar Limited (NYSE: TSL), JA Solar Holdings Co., Ltd. (ADR)(NASDAQ: JASO) and ReneSola Ltd. (ADR)(NYSE: SOL)

Prices quoted in CNY include 17% VAR domestic tax.