© ermess dreamstime.com Analysis | July 24, 2014
Demand uncertainty in July adds pressure on wafer makers
Impacted by the US-China trade war, PV cell manufacturers’ utilization rates continued to drop in June, and thus affected manufacturers’ sales performances, according to EnergyTrend, a subsidiary of Taiwan-based market intelligence firm TrendForce.
“Market demand will remain weak in July before the result of the US-China anti-dumping preliminary verdict is announced. However, manufacturers currently have different strategies because they hold different opinions toward the result. While those that are optimistic about future demand have decided to continue with production, others have decided to focus on inventory control. Yet, clients still hold conservative attitudes toward the result, thus they are less willing to place orders, which added stress on manufacturers’ stocks,” said Arthur Hsu, research manager at EnergyTrend. Recently, wafer manufacturers’ shipments have been low due to decreased orders from downstream clients, which raised manufacturers’ inventory levels. Certain manufacturers’ inventory levels meanwhile remained unchanged for nearly a month, which affected transaction prices. According to EnergyTrend’s latest price quotes, overall wafer quotation declined US$0.03-0.05/piece. Based on final transaction prices, high-efficiency multi-si wafer prices have dropped below US$1.0/piece to US$0.98/piece. Also, pressured by cost reduction, normal-grade multi-si wafer prices reached US$0.93-0.96/piece. Yet, the pricing may drop to US$0.9/piece if shipments continue to be low. “Aside from declined prices, polysilicon manufacturers have aggressively asked clients to fulfill their contracts, which added more stress on wafer manufacturers. Since Korean and European manufacturers play more dominant roles when enforcing contracts, adjustments have yet to be made according to spot market changes. Hence, current contract prices remained at US$22-23/kg. In addition, due to the increased polysilicon inventory and slow stock clearance, Taiwanese manufacturers’ excess inventories will have to be dispatched by trading companies, added Hsu. Price Quotes Pressured by decreased demand and excess inventory, manufacturers continued to lower price quotes for certain clients, leading to price fluctuations. Polysilicon prices declined 0.07% to US$20.411/kg. Multi-si wafer prices came to US$0.974/piece, down 0.2%. Mono-si wafer prices dropped 0.08% to US$1.191/piece. Due to uncertainties prompted from the US-China trade war and weak demand in Europe, cell prices (CW 28) came to US$ 0.359/watt, down 0.55%, noted EnergyTrend.