Weekly Solar Market Price Trends: Mainland China Report 15

Solarzoom Solar Market Report Nov 5-Nov 9, 2012

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Silicon material

The domestic market price of level-1 material is 127 CNY/kg, and 120 CNY/kg for level-2 ones.  The price of the imported level-1 materials is $18.99 /kg, while it stands at $18.718 /kg for level-2 ones.

Polysilicon pricing has decreased slightly for domestic material, and had a flat to minimal increase for the foreign material. In addition, since the price of silicon material is approaching the cost, manufacturers can only get little to no profit and some manufacturers chose to shut down for the time being. Under such a gloomy situation, some producers are trying to focus on improving their technology in order to reduce costs. With the start of the 18^th CPC National Congress, most manufacturers are focused on market movement.

Wafer

This week, regarding mono-c-Si 125mm*125mm wafer, the price of tier-1 suppliers stood at 5.0 CNY/pc, and at 4.1 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 7.35 CNY/Pc for tier-2 ones. In terms of poly-c-Si 156mm*156mm wafer, the price of tier-1 suppliers reached 6.60 CNY/pc, and 5.8 CNY/pc for tier-2 ones.

Prices for wafers this week had no change in comparison to the prior week. For the last few weeks, the demand for poly-c-Si wafers was stable and the price settled, particularly for grade-A wafers. On the other hand, the market for grade-B wafers had shrunk, which brought an increase in inventory, and now this class of product has been difficult to clear. Mono-c-Si wafer is trending toward stability, but the demand is not likely to see an improvement in the short term. Most firms have problems with cash flow and since the majority of material suppliers request payment in cash, some of the orders do not get processed.

Cell

Currently, considering mono-c-Si 125mm*125mm cell, the price of tier-1 suppliers stands 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 is 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 suppliers has reached 2.45 CNY/W, and 2.1 CNY/W for tier-2 ones.

Cell prices remained flat compared to the prior week, while demand for the product improved. Nonetheless, trading volume is staying at low levels. Considering that demand for domestic modules is increasing and at this point many modules firms have shut down, selling conditions are seen as somewhat favorable moving forward. Despite this, most cell manufacturers are very demanding on payment terms and do not accept sales on credit cycles, which keeps trading volume down. Since the ASP is very low, and manufacturing costs are higher, there is limited desire to recover utilization levels. Some manufacturers are trying to raise quotes, but this only adds to confusion around the price.

Module

Concerning mono-c-Si 190W module, the price of tier-1 suppliers stands at 4.35 CNY/W, and 3.95 CNY/W for tier-2 ones. As to mono-c-Si 245W module，the price of tier-1 suppliers is at 5.0 CNY/W, and 4.55 CNY/W for tier-2 ones. In terms of poly-c-Si 230W module, the price of tier-1 suppliers has reached 4.0 CNY/W, and 3.65 CNY/W for tier-2 ones. Concerning mono-c-Si 195W module, the price of tier-1 suppliers stands at 4.50 CNY/W, and 4.0 CNY/W for tier-2 ones. As to mono-c-Si 250W module, the price of tier-1 suppliers is at 5.10 CNY/W, and 4.6 CNY/W for tier-2 ones. And in terms of poly-c-Si 240W module, the price of tier-1 suppliers has reached 4.30 CNY/W, and 3.95 CNY/W for tier-2 ones.

In terms of the November market, the domestic module market remains soft. At present, the inventory volume of modules at the European ports has been at the minimum quantity levels. Those with inventories have not engaged in price competition; the pricing in some cases continues to support positive gross margins for some makers. A lot of small and medium size module manufacturers have closed their doors, while utilization for tier-1 companies has returned to higher levels. Market conditions are expected to be driven by this differentiation until the better part of the December.

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