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Strong demand from major markets such as China, the United States, Japan, and India ensures that first-tier photovoltaic (PV) module manufacturers will have fully booked capacities to the end of 2015. In particular, the installation growth rate of PV systems in China continues to rise and may exceed this year's expectations. This prospect in turn is driving up prices of multi-Si wafers, cells and modules, according to the latest PV market price report by EnergyTrend, a division of TrendForce.
According to EnergyTrend analyst Corrine Lin, European and U.S. polysilicon exporters have rerouted their products to Taiwan and South Korea since the end of August, when China suspended the tariff exemption rule for process trade. With the vast Chinese market behind a high tariff barrier, global polysilicon prices are slumping due to oversupply, dropping to a low of $13.50 to $14/kg on average. However, this does not mean that the Chinese market is currently witnessing a price increase due to the decrease of imports, and the average price there remains around RMB114 to RMB118/kg. Further reduction of imports may start to have an effect on the Chinese market between late September and early October, and prices will have a chance to bounce back.
Nonetheless, this price recovery would be limited because domestic polysilicon producers are expanding their capacities on a massive scale. Moreover, the closing of process trade loophole will not have a significant impact on imports from the leading global suppliers, South Korea's OCI and Germany's Wacker. Based on EnergyTrend's projection, the price threshold in the Chinese polysilicon market will be close to RMB125/kg.
As for Si wafers, rising cell prices in China, Taiwan and markets outside these two countries have resulted in a gradual price recovery of Chinese multi-Si wafers. Prices of Taiwanese multi-Si wafers, however, will stay relatively flat around $0.82 to $0.825/pc in September because they are challenged by lower-priced products from second-tier Chinese suppliers. Looking ahead in October, prices of multi-Si wafers will rise steadily in China. Prices of Taiwanese multi-Si wafers will also go up during the same month, but such increases will be marginal as Chinese suppliers will offer competitive prices due to favorable exchange rates.
PV cells are the main beneficiaries of the price hikes along the supply chain because of the growing end-market demand for high-efficiency products. Many Taiwanese cell manufacturers have been able to keep their prices at $0.32/W on average owing to their products' efficiency rates, which can reach upwards of 17.8%. Taiwanese cells are expected to rise to the $0.325/W level, while the Chinese cells will be approaching to the range of RMB2.25 to RMB2.30/W. China and the United States are rushing to complete their PV power plants before the conclusion of 2015, and whether price increases in the cell market will start to level off at the end of this year remains to be seen. As for products based on the emerging passivated emitter rear cell (PERC) technology, cell manufacturers will need additional time to make sure their respective PERC processes are stable enough for mass production. Additionally, the overall volume of PERC product trades has fallen short of expectations due to lackluster demand.
In the module market, rising demand of PV power plants in China have helped prices to increase slightly. Some recent orders have passed the RMB4/W threshold, and prices will keep rising steadily on a weekly basis. Second-tier module suppliers are also seeing their orders returning to the range of RMB3.80 to RMB3.95/W since their capacities are as fully booked as first-tier suppliers. The current market will significantly contribute to module manufacturers' cash flows, so the outlook in the near future remains positive.