China’s World Beating Solar Manufacturers Struggle To Make Profits As Prices Continue Freefall

Polysilicon Decline Leads

Polysilicon, the earliest part of the solar supply chain where China’s manufacturing capacity is almost 90% of active global capacity by some estimates , prices declined in the week ending May 16 yet again. At RMB 39-44/kg for mono-grade polysilicon, orders below RMB 40/kg remained few for Tier-1 manufacturers, while their Tier-2 and Tier-3 peers saw wider price ranges. The only saving grace might be the slower pace of price declines. However, the declines may not have hit a floor yet,as overall supply is still considerable, despite some manufacturers reducing production and bringing forward maintenance. More significant reductions are likely in the third quarter. A report cites five of 17 makers of polysilicon in China have cut output for maintenance and the remainder plan to do so. Most are reluctant to sell at current prices, risking higher inventories of old products.

Non-China polysilicon prices stabilized at USD 18-23.5/kg. While long-term orders still dominated the market, there have been some small-volume sporadic orders at higher price ranges. Recently, non-China polysilicon has seen weaker demand and less active shipments, as manufacturers in Cambodia, Malaysia, Thailand, and Vietnam are cautious due to uncertainties regarding U.S. measures against cell and module exports from the four countries.

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Wafer Prices Drop faster

A full blown price war has broken out in n-type wafers, especially the 183mm wafers. Apart from Tier-1 manufacturers, the lowest quote from Tier-2 and Tier-3 manufacturers reached below RMB 1.2/piece. Infolink claims that based on RMB 42/kg of average polysilicon price this week, wafer manufacturers still faced gross margins as low as -30%.

Each format declined by 5-11%. N-type 183mm wafers only sustained prices at RMB 0.15/W, with a gap of RMB 0.03-0.04/W from p-type 182mm, p-type 210mm, and n-type 210mm wafers (RMB 0.18-0.19/W).

Current prices and inventory levels reflect the severe wafer oversupply.

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Cell Prices Reflect Weakness

Tracking wafer prices, Cell prices reached RMB 0.31-0.32/W for p-type M10 cells and RMB 0.33-0.34/W for G12 ones.

The price gap between M10 TOPCon and PERC cells has narrowed to RMB 0.02/W and will continue shrinking. Considering the historical trend of product phase-outs, Infolink expects prices for n-type and p-type M10 cells will undergo a reversal in the second half of 2024, with n-type ones becoming less expensive and p-type becoming more expensive.

Module

Even as the domestic China market managed to sustain demand thanks to large government orders, demand in export markets was more soft, due to high inventories and demand related issues, besides the tariff impact . Prices for TOPCon modules came in at RMB 0.88-0.92/W this week, mostly below RMB 0.9/W. For distributed-generation projects, prices slipped to RMB 0.85-0.93/W due to price declines across the supply chain.

For 182mm PERC glass-glass modules, prices sat at RMB 0.78-0.90/W this week, with projects in China experiencing a more noticeable decrease towards RMB 0.83-0.85/W. For HJT modules, prices fell to RMB 0.97-1.18/W, averaging RMB 1.1/W, with the low-price range reportedly reaching below RMB 1/W.

In non-China markets, PERC module prices slightly decreased to USD 0.1-0.105/W.

TOPCon module prices varied significantly by region, sitting at EUR 0.10-0.13/W in Europe, USD 0.12-0.13/W in Australia, and USD 0.10-0.12/W in Brazil and the Middle East, with module makers offering quotes below USD 0.09/W to secure orders.

As for HJT modules, prices stabilized at USD 0.13-0.15/W.

The U.S. placed fewer orders for the second quarter. Prices have varied more recently. For centralized-generation projects, prices (DDP) came in at USD 0.22-0.35/W for PERC modules and USD 0.23-0.36/W for TOPCon ones. For distributed-generation projects, local module makers delivered at USD 0.2-0.25/W (DDP).