Chinese Solar Wafer Giants Drop Prices as Silicon Shortage Eases
Wei Zhongyuan
DATE:  Nov 29 2022
/ SOURCE:  Yicai
Chinese Solar Wafer Giants Drop Prices as Silicon Shortage Eases Chinese Solar Wafer Giants Drop Prices as Silicon Shortage Eases

(Yicai Global) Nov. 29 -- China’s top two suppliers of photovoltaic wafers, Longi Green Energy Technology and TCL Zhonghuan Renewable Energy Technology, cut their prices for the second time in four weeks in the last few days as the supply of silicon, which is the key raw material used to make solar panels, improves, putting less pressure on prices, industry insiders told Yicai Global.

Longi Green Energy and TCL Zhonghuan announced price reductions on Nov. 25 and Nov. 27 respectively, following previous price cuts late last month. These are the first price reductions this year, and a reversal of the previous upward trend due to the soaring cost of raw materials.

This shows that there is a lot of new capacity for silicon coming onto the market and the supply shortage is ending, a new energy industry analyst told Yicai Global.

“If silicon prices keep sliding, wafer makers will have to find a way to quickly offload stock made from high-priced silicon, which will inevitably lead to lower wafer prices,” the analyst said.

Silicon prices have more than doubled since the beginning of the year, reaching a record high of CNY330,000 (USD46,000) per ton recently, as demand outstripped supply. As a result, many raw material suppliers started to boost capacity.

China’s polysilicon production capacity should double this year from the year before to 1.2 million tons a year and double again to 2.4 million tons a year by 2023, according to the China Nonferrous Metals Industry Association’s silicon branch. Silicon output should reach 820,000 tons this year, a two-and-half-fold jump from last year.

“As more silicon capacity comes online, there is more space to bargain,” the analyst said. These price reductions will then be transmitted down the industrial chain to the battery and solar panel makers, he added.

Battery Prices

“Lower silicon prices will be a boon to battery manufacturers, who have hardly made any money recently due to the great cost pressures,” a source at a leading PV enterprise told Yicai Global.

“Battery prices are unlikely to drop in the short-term as factories will need to make up for the previous extremely thin profit margins, but prices will certainly sink in the long term,” he said.

“Although it is hard to see a direct impact of silicon price cuts on batteries, the lower cost of raw materials will benefit the whole industry,” he added.

It would appear that only those involved in the upstream of the industrial chain are losing out. The stock of silicon giants Tongwei and Shangji Automation as well as equipment supplier Autowell Technology has lost more than 10 percent of its value since early October.

Editors: Tang Shihua, Kim Taylor

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Keywords:   Price Adjustment,Supply and Demand,Capacity Expansion,Silicon Material,Silicon Wafer,Solar Cell,Solar Module,Solar Power Station,Industry Analysis