Although polysilicon mono-dense had stabilised at an average price of RMB58/kg (US$8.01/kg) at the end of January, according to data from both EnergyTrend and Shanghai Metals Market (SMM), its price hit a new low in the week beginning 1 April 2024 to RMB52/kg.
The price decrease for n-type polysilicon is even bigger, with a drop of RMB8 from the previous week for the average price from EnergyTrend, and sits at RMB60/kg as shown in the chart below.
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The week-on-week decrease means that, currently, the price of p-type polysilicon material is lower than the historical low of US$6.75/kg reached in June 2020, according to Johannes Bernreuter, head of polysilicon market analyst firm Bernreuter Research, who tells PV Tech that n-type has “undercut the low end of our forecast for the first half of 2024 of US$7.85/kg”.
The price gap between p-type and n-type polysilicon materials has significantly reduced after it started to widen at the beginning of the year.
Despite the p-type price falling below the historical low reached in June 2020, Bernreuter expects the p-type price to drop even further and go below US$6/kg, without the added-value tax, saying that the price for n-type will be dependent on when vertically integrated solar manufacturer Tongwei brings online its polysilicon capacity.
“If it’s delayed then the price might only lose a little bit. If it goes the factory comes on stream in the second quarter then the price should go down,” says Berneuter. Chinese polysilicon manufacturer Daqo New Energy is also expected to begin initial production of its new Inner Mongolia 5B facility in Q2 2024, adding 100,000MT of annual nameplate capacity.
“As the available supply of n-type material increases, customers wouldn’t have to resort to p-type material or high-quality p-type material as a replacement for the n-type material. That would then reduce the demand for p-type material and send the price for p-type material down below US$6/kg,” explains Bernreuter.
New entrants and falling wafer prices
With companies such as Tongwei and Daqo New Energy expected to commission more capacity this year, the industry is poised to end with an oversupply of 1.4 million tonnes of polysilicon this year, as a report from Bernreuter Research in November highlighted.
Bernreuter says that new entrants have delayed the startup of new facilities, with many likely to end up as stranded investments. “There is so much new capacity that the capacity of new entrants is basically not needed. And even those of smaller and medium manufacturers will probably disappear from the market,” adds Bernreuter.
Along with a price drop for both p-type and n-type polysilicon, wafer prices have also decreased, week-on-week, with 182mm size n-type wafers reaching an average price of RMB1.6/kg, according to EnergyTrend.
According to InfoLink Consulting, manufacturers have started planning for production cuts this week, although the timeframe necessary for the change to happen will have limited impact into the capacity available in the market until mid- to late-April. Due to the current production plans, wafer prices are expected to continue decreasing in the short-term, added InfoLink.
‘It’s going to be much harder to sell mono-PERC in this market’
In the US, module prices have seen “significant” price declines across the board, according to Mike Hall, CEO at Anza, a data and technology procurement marketplace for solar and energy storage in the US.
“In aggregate, the median price dropped 31% or 12.3 cents between March 2023 and February 2024,” says Hall, adding that the price drop also happened across all technologies, as well as for tier one and non-tier one manufacturers.
Hall explains the price decline is due to an excess inventory, both from buyers and sellers, which in itself was caused by the moratorium from US President Joe Biden for solar panels that is set to end in June 2024. “When the moratorium came, everybody was in a rush to get supply. And what that led to was very long lead times and high prices. Prices were going up, while lead times were long. What happened was buyers bought more than a year in advance,” adds Hall.
This excess inventory in the past year did not only happen in the utility-scale market, but also for residential and commercial, which dragged on pricing for utility-scale and resulted in the module price decrease.
Technology-wise, Hall mentions that the emergence of TOPCon (tunnel oxide passivated contact) modules in the market put pressure on the price for mono-PERC (passivated emitter and rear cell) modules as its market share declined.
“We are still seeing PERC transactions, but it’s fair to say the PERC market share is declining fast. We see an environment where TOPCon product is becoming more abundant, more available and prices are low across the board and generally lower than the budgets developers were carrying,” adds Hall.
In the period during March 2023 and February 2024, mono-PERC prices have dropped by 28%, while TOPCon module prices have decreased by 25%. “In six months to a year from now, it’s going to be much harder to sell mono-PERC in this market,” concludes Hall.