Weekly Solar Market Price Trends: Mainland China Report 12

Solarzoom Solar Market Report Oct 15-Oct 19, 2012

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Silicon material

Domestic market price of level 1material is 133 CNY/kg, and 129 CNY/kg for level 2-ones.  The price of the imported level-1 materials is $19.59 /kg, while it stands at $19.914 /kg for level-2 ones.

The result of the US’ AD & CVD investigation made the market gloomier and many manufacturers feel disappointed. With the shrinking demand for downstream products, silicon material also is in a downtrend. At present, since the cost of China’s poly silicon is high, many small-scale manufacturers cannot adapt to the limited market, and more and more manufacturers choose to shut down. Currently, only four or five tier-1 manufacturers are still in production, and it is expected that the domestic silicon material market will remain sluggish for the near term. 

Wafer

Concerning mono-c-Si 125mm*125mm wafer, the price of tier-1 suppliers stood at 5.0 CNY/pc, and 4.3 CNY/pc for tier-2 ones. As to mono-c-Si 156mm*156mm wafer, the price of tier-1 suppliers arrived at 7.8 CNY/pc, and 7.5 CNY/Pc for tier-2 ones. In terms of poly-c-Si 156mm*156mm wafer, the price of tier-1 suppliers reaches 6.65 CNY/pc, and 6.2 CNY/pc for tier-2 ones.

Recently, the utilization of China’s wafer firms remains low, and the market price has been below the cost, especially with the pricing of mono-c-Si wafer. At the present time, most mono-c-Si wafer manufacturers are not actively taking orders, and they are focused on how to reduce their loss, so they are all unwilling to reduce pricing any further. However, other manufacturers are underselling their goods; thus, the market situation remains uncertain at the moment. Due to the serious overcapacity of domestic wafer, the downstream demand cannot create improvement. At present, the wafer demand remains slack, and most manufacturers are having a hard time collecting their receivables. Now, many shut-down manufacturers focus on clearing inventories and collecting debts. Some manufacturers are underselling their silicon inventories in order to relieve the pressure on liquidity. Meanwhile, specific small-size manufacturers have shut down and are selling their equipment in order to completely withdraw from the industry.

Cell

Currently, considering mono-c-Si 125mm*125mm cell, the price of tier-1 suppliers stood at 2.9 CNY/W, and 2.4 CNY/W for tier-2 ones. Regarding mono-c-Si 156mm*156mm cell, the price of tier-1 suppliers arrived at 3.0 CNY/W, and 2.55 CNY/W for tier-2 ones. In terms of poly-c-Si 156mm*156mm cell, the price of tier-1 supplier reached 2.6 CNY/W, and 2.3 CNY/W for tier-2 ones.

Presently, most domestic small and medium-scale cell manufacturers are now supporting their production by doing OEM. In addition, since the demand is quite stagnant and competition is low, the outputs of high-efficiency cell dropped as well. At the moment, the orders from small-scale systems are relatively stable, so many manufacturers transferred to produce low-efficiency cells, while the utilization in tier-1 manufacturers is more favorable supported by long-term orders and projects. Although the present demand is stagnant, manufacturers will still reject some orders, which may lead them to suffer a great loss, and they will take their cost into consideration when receiving orders. Based on the present cell price, processing cost exceeds it if manufacturers produce themselves. Many cells and modules integrated firms have closed their cell production lines and are purchasing cheaper ones from the market. Despite this, it is expected that the cell demand will not improve in the short term.

Module

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

This week, the market had no improvement and the price kept consolidating. Most module manufacturers feel disappointed in the coming November market since the module price keeps approaching the cash cost line. Some small- and medium-scale manufacturers have to suffer the unprofitable price, and they are not willing to keep reducing the price to avoid more loss. Some manufacturers have even decided to shut down their operations. Meanwhile, most manufacturers are suffering losses, since their inventories at the ports abroad are difficult to be sold out, so they are now very cautious in raising inventories, and they will optimize it according to their own safety margins of inventory levels in comparison to demand conditions. At the same time, module market pricing remains stable.

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