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Is the photovoltaic industry chain starting to stabilize and recover due to the overall rise of silicon materials?
The trend of stabilizing and rebounding silicon material prices seems to be becoming increasingly apparent.
The latest weekly data released by Jibang New Energy on the evening of February 1st (January 25-31) showed that the prices of single crystal dense materials and single crystal re feeding materials exceeded 5% month on month, and the prices of N-type silicon materials increased by more than 10% month on month.
According to the data from the Silicon Industry Branch of the China Nonferrous Metals Industry Association (hereinafter referred to as the "Silicon Industry Branch"), the price of silicon materials has been on an upward trend for three consecutive weeks.
Qu Fang, an investment advisor at Wanlian Securities, stated in an interview with reporters that the current stabilization and recovery of silicon prices are mainly in the photovoltaic industry chain. The entry threshold for silicon materials is relatively high, so the market competition is relatively relaxed at present. At the same time, during the industry reshuffle last year, many companies were unable to make profits and had already experienced production cuts or even shutdowns, which also promoted the improvement of the supply and demand relationship in the silicon material market.
Silicon material prices continue to rebound
After experiencing the highlights of 2022, with the decline in silicon material prices, silicon material companies also experienced a significant decline in their performance in 2023.
The performance forecast disclosed by the silicon material leader Daquan Energy on the evening of January 30th shows that the company expects a net profit of RMB 5.7 billion to RMB 5.8 billion in 2023, a year-on-year decrease of 69.67% to 70.19%. In 2022, Daquan Energy's net profit was 19.12 billion yuan.
Regarding the significant fluctuations in performance, Daquan Energy stated that in 2022, with the support of the national "dual carbon" strategy, various links in the photovoltaic industry will expand and accelerate production. Although the polycrystalline silicon link is also accelerating production expansion, the expansion speed is relatively lagging due to factors such as high technological barriers, large capital investment, long construction cycles, and difficult operation and management. The mismatch of production capacity and changes in supply and demand between upstream and downstream have led to high prices of polysilicon in 2022, attracting a large number of investors to join the construction of polysilicon projects.
In 2023, the impact of cyclical inventory consumption and new production capacity in the industry has been gradually released, leading to a significant increase in domestic polysilicon supply and a rapid decline in polysilicon prices.
Daquan Energy stated that during the reporting period, although the company continued to increase sales efforts, actively digested product inventory, and achieved full sales in all production bases, the company's performance still significantly decreased compared to the same period last year due to the impact of the decline in polysilicon prices.
The performance of Daquan Energy is just a microcosm of the decline in silicon material prices. According to the first week price released by the Silicon Industry Branch on January 4, 2023, the average domestic single crystal re feeding transaction price for that week was 178200 yuan/ton; The average transaction price of single crystal dense materials is 176200 yuan/ton. The last week price released on December 27, 2023 showed an average transaction price of 58300 yuan/ton for single crystal dense materials that week. In 2022, the highest price of silicon materials exceeded 300000 yuan per ton.
With the postponement of some new production capacity and the reduction and control of production by production enterprises, silicon material prices have gradually stabilized since the beginning of 2024 and have continued to rise in the past three weeks.
In addition, the N-type iteration of silicon materials is also accelerating, and the supply of N-type silicon materials is tight. Some outdated P-type silicon material production capacity will accelerate the elimination, which is also one of the supporting factors for the stable recovery of silicon material prices.
In its price analysis for the week ending January 31st, the Silicon Industry Branch also stated that for silicon material companies, some companies have clear bullish expectations. After exploratory price increases in the early stage, they will conduct concentrated transactions at market acceptable prices this week. At the same time, some high-quality P-type silicon materials can play a certain substitute role in the shortage of N-type silicon production capacity, and the price will rise accordingly.
"At present, downstream demand is beginning to differentiate, with a structural shortage of N-type silicon materials, coupled with the demand for downstream stocking during the Spring Festival, resulting in an upward trend in prices. The proportion of granular silicon used by the company for N-type crystal pulling has reached 60% to 70%, but it is still in a state of supply shortage." The relevant person in charge of Xiexin Technology told reporters that currently, Leshan Xiexin Technology operates at full capacity every day, with an average of about 10 vehicles shipped per day in January. ", Nearly 300 tons.
Is the price of the industrial chain rebounding?
Not only the price of silicon materials, but according to the price released by Jibang New Energy, the price of P-type 182mm silicon wafers has also begun to reverse, with a month on month increase of 2.5%, while the prices of downstream P-type M10 batteries and N-type M10 batteries have both increased by more than 2% month on month.
According to the reporter's understanding, as the industry's PERC batteries are gradually being replaced by new technologies such as TOPCon, HJT, and BC, the production capacity of PERC batteries is gradually decreasing. However, the price of PERC batteries still has a certain cost-effectiveness, and there is still a demand for PERC batteries in the market, which has driven up the price of PERC batteries slightly. Meanwhile, as silicon material prices gradually stabilize, silicon wafer prices have also shown a slight rebound. "Both P-type silicon wafers and PERC batteries have a certain market share, and there is still market demand in the short term." The person in charge of Longi Green Energy told reporters that P-type silicon wafers are mainly used in PERC batteries, and the company's HPBC batteries also use P-type silicon wafers. With the gradual increase in HPBC batteries, the market is gradually expanding, which also to some extent expands the demand for P-type silicon wafers in the market.
From the latest prices of Jibang New Energy, the prices of various models of components remain unchanged from last week. Multiple industry insiders have expressed that the transmission of industry chain prices requires a process.
From the performance forecasts of listed companies in the photovoltaic industry chain that have been disclosed so far, although most companies are expected to have an increasing trend in annual performance, many companies saw a month on month decline in net profit in the fourth quarter of last year, and even suffered losses.
In the market's view, with the stabilization and recovery of industry chain prices, the performance of related companies is also expected to gradually recover, and the first beneficiaries are leading enterprises.
"Taking silicon materials as an example, leading companies and second - and third tier companies in the silicon material industry have more advantages in terms of product technology level and market recognition compared to other chains in the industry chain. Therefore, during the rebound of silicon material prices, leading companies have a higher capacity utilization rate.".
At the same time, the competition over technological routes will further promote industry cost reduction and efficiency improvement. Not only in the battery process, but also in the silicon material process, there is currently a technical route dispute.
In Qu Fang's view, particulate silicon has obvious long-term economic efficiency and technological advantages in energy conservation and emission reduction, but the current level of marketization is not high.
The Silicon Industry Branch also stated that in the current situation where there is a large price difference between granular silicon and rod-shaped silicon, the price increase of N-type granular silicon is relatively limited when the quality is good, which is driving the market share of N-type granular silicon to gradually increase.
At the recent 2023 investor exchange conference, Daquan Energy revealed that the unit cost of producing polycrystalline silicon in the first three quarters of 2023 decreased to 49.7 yuan/kg, a year-on-year decrease of 15.1%, and a continuous downward trend of 2 to 3 yuan/kg per quarter. The latest cost data of GCL Technology was disclosed in July 2023, when the production cost of its Leshan project's granular silicon project was approximately 35.68 yuan/kg.
"Under the current cycle of the photovoltaic industry, this year the company will continue to reduce production costs through technological upgrades, modular optimization, and artificial intelligence. At the same time, leveraging the experience and advantages of GCL semiconductor grade silicon material production, the proportion of granular silicon N-type silicon material will be increased to 100%, fully meeting the efficient market demand for N-type silicon." The relevant person in charge of GCL Technology said.
It is understood that although the current industry chain prices have stabilized and rebounded, some enterprises are still in a loss making state.
The latest weekly data released by Jibang New Energy on the evening of February 1st (January 25-31) showed that the prices of single crystal dense materials and single crystal re feeding materials exceeded 5% month on month, and the prices of N-type silicon materials increased by more than 10% month on month.
According to the data from the Silicon Industry Branch of the China Nonferrous Metals Industry Association (hereinafter referred to as the "Silicon Industry Branch"), the price of silicon materials has been on an upward trend for three consecutive weeks.
Qu Fang, an investment advisor at Wanlian Securities, stated in an interview with reporters that the current stabilization and recovery of silicon prices are mainly in the photovoltaic industry chain. The entry threshold for silicon materials is relatively high, so the market competition is relatively relaxed at present. At the same time, during the industry reshuffle last year, many companies were unable to make profits and had already experienced production cuts or even shutdowns, which also promoted the improvement of the supply and demand relationship in the silicon material market.
Silicon material prices continue to rebound
After experiencing the highlights of 2022, with the decline in silicon material prices, silicon material companies also experienced a significant decline in their performance in 2023.
The performance forecast disclosed by the silicon material leader Daquan Energy on the evening of January 30th shows that the company expects a net profit of RMB 5.7 billion to RMB 5.8 billion in 2023, a year-on-year decrease of 69.67% to 70.19%. In 2022, Daquan Energy's net profit was 19.12 billion yuan.
Regarding the significant fluctuations in performance, Daquan Energy stated that in 2022, with the support of the national "dual carbon" strategy, various links in the photovoltaic industry will expand and accelerate production. Although the polycrystalline silicon link is also accelerating production expansion, the expansion speed is relatively lagging due to factors such as high technological barriers, large capital investment, long construction cycles, and difficult operation and management. The mismatch of production capacity and changes in supply and demand between upstream and downstream have led to high prices of polysilicon in 2022, attracting a large number of investors to join the construction of polysilicon projects.
In 2023, the impact of cyclical inventory consumption and new production capacity in the industry has been gradually released, leading to a significant increase in domestic polysilicon supply and a rapid decline in polysilicon prices.
Daquan Energy stated that during the reporting period, although the company continued to increase sales efforts, actively digested product inventory, and achieved full sales in all production bases, the company's performance still significantly decreased compared to the same period last year due to the impact of the decline in polysilicon prices.
The performance of Daquan Energy is just a microcosm of the decline in silicon material prices. According to the first week price released by the Silicon Industry Branch on January 4, 2023, the average domestic single crystal re feeding transaction price for that week was 178200 yuan/ton; The average transaction price of single crystal dense materials is 176200 yuan/ton. The last week price released on December 27, 2023 showed an average transaction price of 58300 yuan/ton for single crystal dense materials that week. In 2022, the highest price of silicon materials exceeded 300000 yuan per ton.
With the postponement of some new production capacity and the reduction and control of production by production enterprises, silicon material prices have gradually stabilized since the beginning of 2024 and have continued to rise in the past three weeks.
In addition, the N-type iteration of silicon materials is also accelerating, and the supply of N-type silicon materials is tight. Some outdated P-type silicon material production capacity will accelerate the elimination, which is also one of the supporting factors for the stable recovery of silicon material prices.
In its price analysis for the week ending January 31st, the Silicon Industry Branch also stated that for silicon material companies, some companies have clear bullish expectations. After exploratory price increases in the early stage, they will conduct concentrated transactions at market acceptable prices this week. At the same time, some high-quality P-type silicon materials can play a certain substitute role in the shortage of N-type silicon production capacity, and the price will rise accordingly.
"At present, downstream demand is beginning to differentiate, with a structural shortage of N-type silicon materials, coupled with the demand for downstream stocking during the Spring Festival, resulting in an upward trend in prices. The proportion of granular silicon used by the company for N-type crystal pulling has reached 60% to 70%, but it is still in a state of supply shortage." The relevant person in charge of Xiexin Technology told reporters that currently, Leshan Xiexin Technology operates at full capacity every day, with an average of about 10 vehicles shipped per day in January. ", Nearly 300 tons.
Is the price of the industrial chain rebounding?
Not only the price of silicon materials, but according to the price released by Jibang New Energy, the price of P-type 182mm silicon wafers has also begun to reverse, with a month on month increase of 2.5%, while the prices of downstream P-type M10 batteries and N-type M10 batteries have both increased by more than 2% month on month.
According to the reporter's understanding, as the industry's PERC batteries are gradually being replaced by new technologies such as TOPCon, HJT, and BC, the production capacity of PERC batteries is gradually decreasing. However, the price of PERC batteries still has a certain cost-effectiveness, and there is still a demand for PERC batteries in the market, which has driven up the price of PERC batteries slightly. Meanwhile, as silicon material prices gradually stabilize, silicon wafer prices have also shown a slight rebound. "Both P-type silicon wafers and PERC batteries have a certain market share, and there is still market demand in the short term." The person in charge of Longi Green Energy told reporters that P-type silicon wafers are mainly used in PERC batteries, and the company's HPBC batteries also use P-type silicon wafers. With the gradual increase in HPBC batteries, the market is gradually expanding, which also to some extent expands the demand for P-type silicon wafers in the market.
From the latest prices of Jibang New Energy, the prices of various models of components remain unchanged from last week. Multiple industry insiders have expressed that the transmission of industry chain prices requires a process.
From the performance forecasts of listed companies in the photovoltaic industry chain that have been disclosed so far, although most companies are expected to have an increasing trend in annual performance, many companies saw a month on month decline in net profit in the fourth quarter of last year, and even suffered losses.
In the market's view, with the stabilization and recovery of industry chain prices, the performance of related companies is also expected to gradually recover, and the first beneficiaries are leading enterprises.
"Taking silicon materials as an example, leading companies and second - and third tier companies in the silicon material industry have more advantages in terms of product technology level and market recognition compared to other chains in the industry chain. Therefore, during the rebound of silicon material prices, leading companies have a higher capacity utilization rate.".
At the same time, the competition over technological routes will further promote industry cost reduction and efficiency improvement. Not only in the battery process, but also in the silicon material process, there is currently a technical route dispute.
In Qu Fang's view, particulate silicon has obvious long-term economic efficiency and technological advantages in energy conservation and emission reduction, but the current level of marketization is not high.
The Silicon Industry Branch also stated that in the current situation where there is a large price difference between granular silicon and rod-shaped silicon, the price increase of N-type granular silicon is relatively limited when the quality is good, which is driving the market share of N-type granular silicon to gradually increase.
At the recent 2023 investor exchange conference, Daquan Energy revealed that the unit cost of producing polycrystalline silicon in the first three quarters of 2023 decreased to 49.7 yuan/kg, a year-on-year decrease of 15.1%, and a continuous downward trend of 2 to 3 yuan/kg per quarter. The latest cost data of GCL Technology was disclosed in July 2023, when the production cost of its Leshan project's granular silicon project was approximately 35.68 yuan/kg.
"Under the current cycle of the photovoltaic industry, this year the company will continue to reduce production costs through technological upgrades, modular optimization, and artificial intelligence. At the same time, leveraging the experience and advantages of GCL semiconductor grade silicon material production, the proportion of granular silicon N-type silicon material will be increased to 100%, fully meeting the efficient market demand for N-type silicon." The relevant person in charge of GCL Technology said.
It is understood that although the current industry chain prices have stabilized and rebounded, some enterprises are still in a loss making state.
"In 2024, the photovoltaic industry will move forward in the process of adjustment. On the one hand, technology is advancing, and on the other hand, backward enterprises and production capacity will accelerate their elimination, thereby promoting the healthy development and technological progress of the industry." Qu Fang said.
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