with the first quarter of 2024 photovoltaic silicon wafer market cold, related supporting such as quartz crucible, diamond wire, thermal field and other silicon wafer consumables enterprises also suffered a impact on the performance.

Before the May Day holiday, Ou Jing Technology (001269.SZ) released the first quarter report of 2024. During the reporting period, its operating income was 0.34 billion yuan, down 46.56 percent from the same period last year. Net profit attributable to shareholders of listed companies (hereinafter referred to as "net profit") was 0.022 billion yuan, down 87.41 percent from the same period last year.

"China Business News" reporter noted that the decrease in quartz crucible revenue is the main reason for the change in the performance of European Crystal Technology. Ou Crystal Technology responded to investors on the interactive platform, saying: "At present, the photovoltaic industry is facing a phase of overcapacity, the main industry chain product prices are at recent historical lows, the overall profitability of the industry is under pressure. The company's first quarter revenue decline is mainly due to the decrease in quartz crucible revenue."

Regarding the company's performance changes and subsequent product prices, Ou Jing Technology did not disclose more information to reporters. On May 8, Zhang Liang, chairman of the company, said at the performance presentation meeting that the sales of quartz crucible are based on market prices, and the company will dynamically adjust them according to market conditions.

Euryst Technology is known as "the first quartz crucible" and will be listed on the Shenzhen Stock Exchange in September 2022. In the past few years, with the rapid expansion of photovoltaic silicon wafer enterprises, as the photovoltaic silicon wafer leader TCL Central (002129.SZ) quartz crucible supplier-European Crystal Technology, to eat the market dividend.

Quartz crucible is a consumable quartz device used in photovoltaic and semiconductor fields, which can support continuous crystal pulling under high temperature conditions (belonging to silicon wafer production) and is used to store polycrystalline silicon raw materials or single crystal recycled materials. Only from the photovoltaic field, the upstream raw material of quartz crucible is high-purity quartz sand, and the downstream is photovoltaic silicon wafer.

Information from the Silicon Industry Branch of the China Nonferrous Metals Industry Association shows that in the first quarter of 2024, there was a phased mismatch between supply and demand for photovoltaic silicon wafers and an expansion of the decline in silicon wafer prices. According to the reporter's rough statistics, taking the price of silicon wafers on March 28 as an example, the average transaction price of M10 monocrystalline silicon wafers (182mm/150 μm) dropped to 1.80 yuan/wafer, down 71.88 from 6.4 yuan/wafer in the same period last year (March 30).

in this context, TCL central, longji green energy (601012.SH), hongyuan green energy (603185.SH) and other photovoltaic silicon wafer enterprises lost 0.88 billion yuan, 2.35 billion yuan and 0.141 billion yuan respectively in the first quarter of 2024.

As photovoltaic silicon wafers are still at the bottom of the market cycle, the demand and price for quartz crucibles will be suppressed.

SMM analyst Zheng Tianhong analyzed to reporters that since the beginning of this year, there has been inventory pressure in the photovoltaic silicon wafer link, which indirectly indicates weak demand, which also increases its willingness to sell at lower prices. As the current silicon wafer price has hovered at the cost line, so for the upstream link is the opposite direction of the price behavior, quartz crucible natural price reduction.

Zheng Tianhong pointed out that due to the recent weakening of silicon wafer production, the demand for crucibles has begun to decrease and the price has gradually dropped. The price of 36-inch crucibles has dropped to the current 15000-20000 yuan/piece, with a large range and fast speed.

The reporter noticed that under the price conduction, the price of high-purity quartz sand in the upstream link of the quartz crucible is also under pressure.

Zheng Tianhong analyzed and pointed out in mid-April that since January this year, the overall turnover of the domestic high-purity quartz sand market has been cold, mainly due to the declining demand for quartz crucibles. Recently, although the demand for silicon wafers has slightly improved, but the crucible enterprise's own inventory is high, and subject to the downstream (silicon wafer) profit situation is limited, the willingness to buy quartz crucible is not high, quartz crucible's own product prices continue to fall.

"in the first quarter of this year, the price of high-purity quartz sand has fallen by more than 30% compared with last year, and has halved compared with the highest point in the past two years." Zheng Tianhong told reporters that high purity quartz sand prices still exist to continue to fall space. "Domestic and foreign supply side began to release, the overall supply and demand pattern of quartz sand to a slight oversupply, price support weakened."

Affected by this, quartz shares (603688.SH), known as the "sand king", achieved operating income of 0.394 billion yuan in the first quarter of 2024, down 67.82 percent from the same period last year, and net profit of 0.158 billion yuan, down 80.70 percent from the same period last year. Judging from the stock price performance, as of the close of trading on May 7, 2024, the company's stock price was 72.37 yuan/share, which has been halved from the high of 163.98 yuan/share in August 2022. This is a reversal compared to the past market where "sand is king" and stock prices and profits are flying together.

In addition to changes in the market for quartz crucibles and their raw materials, high-purity quartz sand, the consumables required for the photovoltaic silicon wafer segment (Note: for photovoltaic silicon wafer cutting) also showed similar trend changes, and the performance of related companies fluctuated. Reporters noted that Meichang shares (300861.SZ), Daile New Materials (300700.SZ), Star Technology (002132.SZ) and other performance losses or decline.

Meichang is the leader of photovoltaic diamond line, with a market share of 40%-50%. The largest customer is Longji Green Energy. The company achieved operating income of about 0.857 billion yuan in the first quarter of 2024, a year-on-year decrease of 13.83; net profit of about 0.195 billion yuan, a year-on-year decrease of 48.46.

Meichang explained that since December 2023, the diamond wire industry has obvious overcapacity, which has intensified industry competition. At the same time, the company has actively adjusted its marketing strategy due to the pressure of cost reduction brought about by the destocking of silicon chips. In the first quarter of 2024, the sales price of products was significantly lower than that of the same period last year, and the profit margin was narrowed.

It is understood that the price of steel wire diamond wire in the first quarter of 2024 is about 20 yuan/km. Meichang shares said in an investor activity in late April: "affected by the pressure of cost reduction brought about by the de stocking of silicon chips and the adjustment of the company's active marketing strategy, the sales price of diamond wire products still maintains a downward trend, but the price reduction has slowed down."

In addition, the photovoltaic thermal field, an important consumable in the crystal-pulling process of photovoltaic silicon wafer production, was affected by the market in the first quarter of 2024.

Jinbo shares (688598.SH) is a photovoltaic carbon/carbon composite thermal field leading enterprises, the main single crystal pull furnace thermal field system series products (crucible, guide tube, insulation tube, heater, plate and electrode, etc.), applied to the photovoltaic industry's crystalline silicon manufacturing thermal field system. The company's main downstream customers include Longji Green Energy, TCL Central, Jingke Energy (688223.SH), Jingao Technology (002459.SZ) and other major photovoltaic silicon wafers and photovoltaic integration enterprises.

The reporter noted that Jinbo shares suffered a loss in the first quarter of 2024 due to the reduction in the sales price of the thermal field system series products. During the reporting period, Jinbo's operating income was 0.202 billion yuan, down 33.09 percent from the same period last year, while net profit was -0.055 billion yuan, down 146.35 percent from the same period last year.

"The price reduction of the thermal field system series is mainly affected by the price transmission pressure of silicon wafer enterprises." Jinbo shares said.

Changes in the photovoltaic silicon wafer market are directly related to the profitability of silicon wafer consumables companies. In Zheng Tianhong's view, the current photovoltaic market is more suitable for short-term observation, because there are many and complex uncertain influencing factors, and corporate profit performance needs to be analyzed according to market changes.