gorillagoldslot| The improvement on the supply side is not yet obvious. The photovoltaic industry is temporarily difficult to reverse

Liu Canbang, a reporter from the Securities Times

China's photovoltaic industry is going through a period of domestic and foreign difficulties. On the one hand, the United States recently announced a tariff on Chinese-made solar energy (000591) cells. On the other hand, the price of the industrial chain has fallen again and again, and it is difficult to say when the bottom will come.

The latest release of Silicon Branch of China Nonferrous Metals Industry AssociationGorillagoldslotData show that the price of polysilicon has continued to decline this week, with the average transaction price of N-bar silicon being 4.Gorillagoldslot.300,000 yuan per ton, down 5.08% from the previous month. The average transaction price of P-type compact material was 37300 yuan / ton, down 4.36% from the previous month. The average transaction price of N-type granular silicon was 37500 yuan / ton, down 6.25% from the previous month.

The decline in silicon wafers was even worse, with the average transaction price of P-type M10 single crystal silicon chip falling to 1.25 yuan per chip, down 20.4% from the previous week; and the average transaction price of P-type G12 single crystal silicon chip dropped to 1.9 yuan per chip, down 8.65% from the previous week. The average transaction price of N-type G12 single crystal silicon wafer was 1.94 yuan per wafer, a week-on-month decline of 11%.

Under the heavy pressure of falling prices, signs of improvement on the supply side have also increased.

According to the analysis of the Silicon Industry Branch, at present, the price of polysilicon has broken through the cash costs of all enterprises in production. Under the pressure of high inventory, some small and old production capacity have been stopped and overhauled, and the vast majority of enterprises are willing to raise prices. In the case of low prices, they choose to hold down the goods. "Silicon production enterprises are facing the situation of selling or losing money, so only some enterprises with difficult cash flow and new factory test materials can still accept price reduction, and most in-production manufacturers have adopted the method of shutdown and overhaul to deal with the bottom price. the supply of silicon will be reduced from this month."

Another example of silicon prices falling below corporate cash costs comes from Tongwei shares (600438). Public information shows that the company's annual average silicon production cost has fallen to less than 42000 yuan / ton in 2023, substantially ahead of the industry average. According to the statement made by Zhou Bin, the company's financial director, at the performance presentation on May 15, this production cost does not include tax costs, nor does it include sales, management and financial expenses.

The supply improvement also applies to silicon wafers, with two head companies and integrated companies sharply reducing operating rates this week, with industry-wide silicon production of about 63GW in May, the same as in February. The Silicon Industry Branch pointed out that the head enterprise did not ship the goods at the early price, so that the inventory at this stage fully meets the downstream purchasing needs, and it is no longer meaningful to produce more wafers at the current cash-losing price. At the same time, the integrated enterprise's external production of silicon wafer is obviously much more cost-effective than its own production, so it adopts silicon OEM, double distribution, direct mining and other ways of operation.

InfoLink Consulting, an industry consultancy, has also observed production cuts in the industry, but has reservations about the pace. "the overall increase in silicon supply this month is still considerable, although some manufacturers have begun to take actions of production reduction and early overhaul, but the strength and determination are not yet obvious, and it is expected that large-scale production reduction in the third quarter may begin." The agency believes that the price of silicon still has the possibility of forced landing under pressure, but the decline and the rate of decline are more and more limited.

A data provided by Infolink reflects the dilemma of the silicon wafer link, that is, at the price of 42000 yuan per ton of silicon, the gross profit margin of silicon wafer enterprises is as high as 30%, and there is a serious blood loss among manufacturers under irrational competition. At present, the inner volume at the end of the silicon wafer continues, and the bidding competition among enterprises is downward. In addition to the step-by-step downward quotation of the head enterprises, the quotation of the second-and third-tier small factories has dropped below 1.2 yuan per piece at the lowest. "the oversupply and demand of silicon wafer link is serious, and if the enterprise production schedule remains high-end, the production risk will continue to expand."

By contrast, the Silicon Industry Branch's statement seems to give a glimmer of hope. As the operating rates of the two front-line enterprises dropped to 60% and 80% respectively. The operating rates of other enterprises have also fallen, so the agency believes that the market is now at a key point in the transformation of supply and demand, and although the phenomenon of industry-wide losses cannot be reversed immediately, as far as a single silicon wafer is concerned, it is pointless to be bearish again.

Dong Ke, secretary of Tongwei shares, also mentioned the improvement of industry supply at the performance presentation meeting: "in order to be conducive to the long-term and sound development of the industry, relevant state departments have begun to actively guide the industry to return to rational investment." At the same time, under the background of the rapid decline in product prices in various links, some enterprises in the industry have terminated project investment or postponed project construction. "

The price of N-type battery also fell sharply this week. Previously, the price of N-type battery was basically higher than that of P-type battery by about 0.1 yuan / W, but this week the price difference between N-type battery and P-type battery has basically flattened. InfoLink data show that the size of P-type M10 slips slightly to 0.31 million 0.32 yuan per watt, and the average price of M10TOPCon battery goes down to about 0.32 million 0.34 yuan per watt. The agency expects the price gap between the two to continue to narrow, and the price of the M10-size Nripple P battery is expected to reverse in the second half of the year, referring to past iterative product price trends.

At the performance presentation meeting on May 14th, battery manufacturer Junda shares (002865) once again mentioned an old point of view, that is, in 2024, P-type battery capacity in the industry is being phased out at an accelerated pace, and with the rapid clearance of backward capacity in the industry, the supply of advanced N-type TOPCon batteries in the industry will show a tight balance trend.

However, judging from the price trend, the market is not convinced by this view. TrendForce Jibang Consulting pointed out that in the upstream huge inventory of N-type silicon wafers and continued irrational prices, the supply-side pressure of battery wafers is gradually strengthening. Although the oversupply is difficult to say, the upstream overfall continues to stimulate downstream component factories to limit the price of battery chips; observing the current inventory water level, it continues to rise. In addition, the bargaining power of the battery chip is weak, it is difficult to stabilize the price, and there is still room for further exploration.

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