There are still more than ten days until April 30th, but the price-cutting wave in the photovoltaic industry chain has already been fully launched.

China Energy Network has noticed that as of April 17th, the prices of silicon wafers, solar cells and modules have been dropping for two consecutive weeks. Silicon material, whose price remained unchanged during the rush to install, has also seen a widespread price drop.

Does this mean that the small cycle of price hikes driven by the rush to install 430 and 531 models has basically come to an end? Will the industry prices hit a new low in the coming period?

All four major links have reduced their prices

The current round of price hikes in photovoltaic products was triggered by the rush to install at the terminals. It began in mid-February and was triggered by the new regulations on distributed management issued by the National Energy Administration and Document No. 136 on the full entry of new energy into the market for trading.

Initially, the component end saw a price increase first, which was then passed on upward, with the prices of solar cells and silicon wafers rising across the board. Among them, the spot price of distributed components from major manufacturers once exceeded 0.8 yuan /W, and the quoted price of BC components even reached 0.85-0.9 yuan /W.

Nowadays, as the rush installation deadline approaches, downstream demand has weakened somewhat, and the supply and demand relationship has reversed. The Silicon Industry Branch of the China Nonferrous Metals Industry Association (hereinafter referred to as "the Silicon Industry Branch") stated that the demand stimulus for downstream products caused by the "531" rush installation had basically ended by mid-April. As the first time point of the "430" and "531" rush to install approaches, the demand for terminal components has basically reached its peak, and the downstream inventory preparation is coming to an end. Subsequently, the demand will gradually decline.

As demand weakens and the entire industrial chain drops in price, the price of silicon wafers has fallen for two consecutive weeks.

According to the data from the Silicon Industry Association on April 10th, the average transaction prices of N-type G12R, N-type G10L and N-type G12 silicon wafers dropped slightly by 1.3% to 2.52%.

On April 17th, the Silicon Industry Association released information indicating that the price of silicon wafers continued to fall. Among them, the price of N-type G12R silicon wafers dropped the most, with an average transaction price of 1.43 yuan per piece, achieving a week-on-week decline of 5.92%. The N-type G10L followed closely with an average transaction price of 1.22 yuan per piece and a week-on-week decline of 3.17%. The average transaction prices of P-type G12 and N-type G12 were 1.63 yuan per piece and 1.53 yuan per piece respectively, which also dropped by 1.81% and 1.29% respectively.

There has also been a continuous price drop in the component section.

According to data from Infolink Consulting, the average transaction price of the bifacial double-glass N-type TOPCon module on April 9th was 0.745 yuan /W, which decreased by 0.005 yuan /W compared with last week. On April 17th, it dropped to 0.735 yuan, another reduction of 1 cent per watt. The average transaction price of 182 and 210TOPCon components used in distributed projects on April 9th was 0.77 yuan /W, a decrease of 1 fen /W compared with last week. On April 17th, it was further reduced by 2 cents per watt to 0.75 yuan per watt.

Even the battery cells, which are the least prone to price fluctuations in the industrial chain, have been continuously falling in price.

Data from Infolink Consulting shows that on April 9th, only the average transaction price of TOPCon210R solar cells decreased by 1 fen /W. By April 17th, it had almost expanded to the entire series of battery cells. The battery with the largest decline was the TOPCon210R cell, which dropped by 4 fen from the average transaction price of 0.29 yuan /W, representing a decline of 12.1%. The average transaction price of TOPCON 182/183.75 series battery cells was 0.3 yuan /W, with a week-on-week reduction of 1 fen /W. Even the average transaction price of the PERC182/183 series has dropped by 1 cent per watt.

The most helpless part is the silicon material stage.

During this round of rush to install, the price of silicon material has not risen. Nowadays, due to the price reduction in downstream industries, prices have dropped across the board except for granular silicon. Among them, the average transaction prices of N-type dense material, N-type reinput material and P-type polycrystalline silicon material decreased by 900 yuan/ton, 700 yuan/ton and 500 yuan/ton respectively, with a decline rate of 2.42%-1.47%.

The price cuts across the four major links of the photovoltaic industry chain have announced that the round of price hikes that began in the middle and late February has basically come to an end.

How much room is there for the price to fall?

Behind the downward trend of photovoltaic prices lies the increasing inventory pressure on manufacturers at all links.

In the component segment, small distributors, unable to cope with the decline in the prices of distributed components, have begun to stockpile them earlier, and some have turned to selling at lower prices.

In the solar cell sector, due to the high utilization rate in April and the demand decline before the policy deadline, the inventory has gradually increased recently. Under the circumstances of oversupply, the prices of 183N and 210RN have dropped.

In the silicon wafer sector, under the dual pressure of weakened terminal demand expectations and battery price drops, manufacturers have a strong willingness to reduce inventory, and the number of price cuts and concessions has significantly increased.

Silicon material is the link with the most severe inventory. China Energy Network has noticed that even after the downstream rush to install, the industry inventory still reached as high as 400,000 tons in March. Nowadays, most silicon wafer manufacturers still prioritize the consumption of their own polysilicon inventories and postpone their polysilicon procurement plans. With sluggish demand, it is expected that the inventory reduction of polysilicon will be slow in April.

Under the pressure of inventory reduction, Infolink predicts that the prices of various sizes of N-type solar cells are expected to fall again before the end of April. The price of silicon wafers is also pessimistic in the short term. The price of 210RN silicon wafers may decline to 1.35-1.4 yuan per piece under cost conversion, and 210N is also expected to develop towards 1.5 yuan per piece.

It is worth noting that in terms of production scheduling, at present, except for the overall reduction in capacity of silicon material enterprises, there does not seem to be a large-scale adjustment in the production scheduling of other links. For instance, the overall operating rate of the silicon wafer sector was 55% to 58% in mid-April, while it was 56% to 58% in late March. This might be related to the fact that the orders signed earlier for downstream components are still being executed. The operating rate has not been reduced, which has further intensified the pressure of inventory reduction in each link of the industrial chain. The short-term downward trend of prices is more stable.

However, in the medium and long term, the prices of the photovoltaic industry chain may not have much room for decline.

Infolink recently stated that the current inventory of components is at a relatively healthy level. Considering factors such as the start-up status of domestic centralized projects and overseas demand, it is unlikely that component prices will experience a significant increase or decline in the second half of the year. The production of solar cells is expected to recover after the production schedule drops and the imbalance between supply and demand eases. The Silicon Industry Association also believes that under the circumstances of reduced supply and low inventory, the decline in silicon wafers will not be significant.

In addition, a new round of self-discipline in the industry has quietly begun, which may help stabilize prices.

China Energy Network has noticed that in early April, news emerged in the industry that a new round of production restrictions and price control would be initiated. Many photovoltaic enterprises have participated in self-discipline meetings to report on inventory and production capacity situations. The next step is to set self-discipline quotas to ensure that the prices of photovoltaic products do not experience a sharp drop after "531". In the second half of the year, production based on sales will continue to be implemented.

It is also reported that component manufacturers are attempting to negotiate with terminal merchants on the order execution prices for June and July. They aim to combine the shipment of previous orders or offer partial discounts in exchange for the continued execution of contracted prices ranging from approximately 0.63 to 0.68 yuan per watt, in order to control the price decline.

Conclusion

Since last year, the photovoltaic industry has been trapped in a vicious circle of "self-discipline - market improvement - deterioration of supply and demand - a new round of self-discipline". The fundamental reason behind this is that the production capacity has not been effectively cleared for a long time.

In this round of price hikes, although the performance of photovoltaic enterprises in the first quarter can be restored, it remains a question mark how much money they can actually make. Short-term price hikes are likely to enable some backward production capacity on the verge of "clearing out" to survive, thereby increasing the difficulty of the "reshuffling" in the photovoltaic industry and prolongs the "reshuffling" time.

After a year and a half of "reshuffling" in the industry, enterprises are under increasing pressure. If this "reshuffle" does not end in a timely manner and the battle line is stretched too long, it may cause a significant loss of vitality to the industry's high-quality production capacity.

According to statistics, as of the third quarter of last year, the combined scale of upstream accounts payable and notes held by just seven leading photovoltaic enterprises reached as high as 444.4 billion yuan. The losses in the industry have shifted from the loss of "cash flow" to the loss of "capital" and "occupation".

Amidst numerous crises, how to accelerate the elimination of backward production capacity in the industry and prevent the last drop of high-quality production capacity from being exhausted in the process of "cutting flesh with a blunt knife" is a difficult problem that all parties must face squarely.