21st Century Business Herald reporter Han Xun reported from Shanghai
With the acceleration of destocking and the gradual clarification of silicon prices, the price of monocrystalline silicon wafers began to stabilize and rebound.
On January 19, the latest data from PVinfoLink showed that the prices of silicon materials, polycrystalline silicon wafers and monocrystalline silicon wafers have all risen collectively.
Just before that, LONGi raised the official offer for monocrystalline wafers on January 16. Compared with a month ago, the price of silicon wafers after the price adjustment increased by 2.4%-5.1%.
Due to the tight balance between global silicon supply and demand in 2021, the price of silicon material rose rapidly, once pushing the price of silicon wafers to a high point in October last year. However, on November 24, 2021, the price of silicon wafers began to fall, and it has been in a downward trend for the next two weeks until December 22, 2021.
On December 29, 2021, the price of polycrystalline silicon wafers began to rebound, and the price of monocrystalline silicon wafers (166mm/165μm) rose slightly to 4.95 yuan / piece. By January 12, 2022, monocrystalline silicon wafers (182mm/165μm) also began to increase in price to 5.85 yuan / piece, until the evening of January 19, the price of all specification types of silicon wafers rose collectively.
So, the question is, what is the reason for this round of silicon wafer rebound? Will it continue to rise in the future? When does it go up? Which listed companies will benefit from silicon wafer price increases?
What triggered this rally
PVinfoLink's latest data shows that the average price of polycrystalline silicon dense materials is 234 yuan / kg, up 1.7% from the previous week; the average price of polycrystalline silicon wafers is 2 yuan / piece, up 2.6% from the previous week; the average price of monocrystalline silicon wafers (166mm / 165μm) is 5.15 yuan / piece, up 4.0% from the previous week; the average price of monocrystalline silicon wafers (182mm / 165μm) is 6.15 yuan / piece, up 5.1% from the previous week. The average price of monocrystalline silicon wafers (210mm/160μm) was 8.10 yuan / piece, up 5.2% from the previous week.
This is the first time since the price fell on November 24, 2021, that the price of silicon wafers has risen collectively, and in less than two months, has the supply and demand of silicon wafers changed?
Photovoltaic manufacturing can be roughly divided into four links: silicon material, silicon wafer, cell and module, and silicon material is the most upstream link of the industry. In fact, since the beginning of this year, silicon material has begun to rebound in advance.
According to the quotation of the Silicon Industry Branch of the China Nonferrous Metals Industry Association on January 12, 2022, the domestic monocrystalline compound feeding price range is 230,000-242,000 yuan / ton, and the average transaction price rises to 234,600 yuan / ton, an increase of 1.21% week-on-week; the price range of monocrystalline dense materials is 228,240,000 yuan / ton, and the average transaction price rises to 232,500 yuan / ton, a week-on-week increase of 1.48%.
CITIC Securities believes that the rise in the price of silicon wafers is mainly in the transmission of upstream silicon prices, and the rise in silicon prices reflects the month-on-month improvement in terminal demand.
In the photovoltaic industry, there have been many times the situation of "silicon is king", mainly in 2004-2008, 2010-2011, and 2020-2021 three times the price of silicon materials rose sharply, resulting in only one direct cause of these results, that is, short-term demand exceeded expectations and supply did not keep up, that is, the so-called "phased supply and demand mismatch".
Recently, the collective rise in silicon wafer prices is also a "phased supply and demand mismatch".
First of all, the price negotiations of upstream and downstream manufacturers have entered a relatively intensive stage, but the continuous decline in the price of silicon wafers in the early stage has made the overall production capacity growth of silicon wafer manufacturers stagnate in a single month, while LONGi shares (601012. SH) and Zhonghuan (002129.SZ) two consecutive rounds of "price reduction" stimulated the accelerated digestion of silicon wafer inventory, resulting in a significant reduction in the supply of tradable monocrystalline wafers on the market, triggering a "phased supply and demand mismatch", making the price of silicon wafers stop falling and rising.
Secondly, since Entering January 2022, the operating rate of downstream cell manufacturers has been correspondingly raised to the level of 60-70%, and the increase in demand for silicon wafers at the battery end has also promoted the rebound in upstream silicon wafer prices.
Third, near the Spring Festival, in order to avoid the restriction of logistics and transportation during the holidays, affecting the supply of relatively strong demand, this week's signing also includes some hoarding demand. Direct demand and indirect demand together support a significant increase in the purchase of silicon materials and wafers, and the demand for phases has increased.
In addition, an emergency also affected the supply of silicon wafers, that is, on January 8, 2022, a 6.9-magnitude earthquake occurred in Menyuan County, Haibei Prefecture, Qinghai. From the perspective of the supply side of silicon wafers, the earthquake has a certain impact on Yinchuan and Qinghai enterprises, and it is initially expected that the two will reduce the supply of silicon wafers by 0.8-1GW in total, causing a shortage of supply in the short term.
It can be seen that the relationship between supply and demand has been reflected in the price increase of monocrystalline silicon wafers.
Whether the price of silicon wafers will rise again
On January 18, 2022, "Silicon Track New Player" Shuangliang Energy Saving (600481. SH) announced that on January 17, 2022, Shuangliang Silicon Materials (Baotou) Co., Ltd. (hereinafter referred to as "Shuangliang Silicon Materials Company") signed the Framework Contract for The Procurement of Silicon Wafers with Tongwei Solar (Chengdu) Co., Ltd. (hereinafter referred to as "Tongwei Solar"), which stipulates that from January 2022 to December 2024, Tongwei Solar expects to purchase a total of 1.048 billion monocrystalline silicon wafers from Shuangliang Silicon Materials Company (including 210mm and 182mm specifications), and expects sales totaling 6.305 billion yuan (including tax) from 2022 to 2024.
Since October 2021, Shuangliang Energy Saving has successively announced the long order of silicon wafer sales with runyang, Aixu, Canadian Solar and other cell and module leaders in 2022-2024, and this time announced the signing of a three-year silicon wafer sales long order with Tongwei Solar, fully demonstrating the demand of downstream cell manufacturers for photovoltaic wafers.
The growth of downstream demand has also stimulated the price increase of silicon wafer manufacturers, LONGi announced on January 16 to adjust the price of its silicon wafer products, the price of different specifications of silicon wafers have been raised, of which the latest quotation of 182mm silicon wafers is 6.15 yuan / piece, an increase of 5.1%; the latest quotation of 166mm silicon wafers is 5.15 yuan / piece, an increase of 2.4%; the latest quotation of 158.75mm silicon wafers is 4.95 yuan / piece, an increase of 2.5%.
This is the first time that LONGi shares will update the silicon wafer quotation in 2022, and unlike the two consecutive price reductions at the end of 2021, LONGi shares have raised the silicon wafer quotation this time.
So, will the price of silicon wafers, which have begun to rebound due to rising downstream demand, continue to rise?
The research report of Zhongyuan Securities believes that the increase in the quotation of silicon materials and silicon wafers reflects the pulling effect of the previous price reduction on the demand of the industrial chain to a certain extent. Considering the increase in the new supply of silicon head enterprises in 2022 and the expansion of production in all links of the industrial chain, it is expected that the prices of each link will still have room to decline.
At present, the most tight supply and demand link in the photovoltaic industry chain is silicon and EVA particles, and with the gradual expansion of silicon production capacity, the price is expected to fall further.
According to the statistics of the Silicon Industry Branch of the Nonferrous Metals Association, and combined with the expansion rhythm of major manufacturers, CITIC Securities estimates that the nominal production capacity of solar-grade silicon materials in the world will reach about 700,000 tons (including granular silicon) by the end of 2021, considering the progress of capacity climbing and the impact of measures such as "double control" of energy consumption, it is expected that the effective production capacity will reach about 570,000 tons in that year, and the release progress of industry capacity in 2022 will be significantly accelerated, the nominal production capacity at the end of the year or nearly 1.2 million tons, and the annualized effective production capacity will reach an estimated 790,000 tons. And the effective capacity growth may be mainly concentrated in the second half of 2022.
Li You, manager of the industrial cycle fund of Chuangjin Hexin, expects that in 2022, the price of industrial silicon and polysilicon in the upstream link of the photovoltaic industry will most likely fall, and the price of silicon wafers will also follow the price of polysilicon, so the price of the entire industry chain will fall with the price of the most upstream raw materials. "From the perspective of unit profit, the unit profit of upstream industrial silicon materials and silicon wafers is likely to decline, while the downstream batteries, components and terminal power station links, their profitability is marginal."
One thing to be clear is that the photovoltaic industry is an industry where supply creates demand, stimulates demand and creates demand through price cuts, and hedges and compensates for the pressure of price cuts through larger sales growth. Therefore, monocrystalline wafer prices are expected to return to a relatively stable water level as productivity gradually increases and supply increases.
Will the industry be overcapacitated?
In the past two years, the development of the photovoltaic industry has been affected by supply demand, the period of determining the upper limit of demand may continue, but the probability of becoming an important factor restricting the development of the industry in the medium and long term will be greatly reduced, and photovoltaic will eventually return to the decline in cost to drive economic improvement, thereby driving the track of demand growth.
In the context of the globalization of carbon neutrality goals, the promotion and use of clean energy has become a global consensus, the landing of domestic policies such as "wind and solar bases" and "county promotion" has accelerated the domestic photovoltaic installation process, and the overseas US Department of Commerce announced that it will no longer double-reverse investigation of Asian photovoltaic manufacturers, which is also conducive to the export of photovoltaic companies.
According to CPIA forecasts, by 2025, under optimistic conditions, the global new installed capacity of photovoltaics will reach 330GW, and the CAGR will be 20.5%. The installed capacity of new photovoltaics in China will reach 90-110GW, and the average annual installed capacity of photovoltaics during the 14th Five-Year Plan period will reach 71-88GW.
Wang Bohua, honorary chairman of the China Photovoltaic Industry Association, predicted at the 2021 China Photovoltaic Industry Annual Conference that driven by the huge domestic photovoltaic power generation project reserves, the new installed capacity of photovoltaics in the mainland may be more than 75GW in 2022.
Fu Honghao, a researcher at Huaxin Securities, believes that the neutral installed capacity of photovoltaics in 2022 is expected to be 230GW, and if the price of the industrial chain falls more than expected, the economy will be further improved, and the installed capacity can reach 260GW.
According to Zhihui PV statistics, the national household installed capacity in December 2021 was about 5GW, coupled with the new household installed capacity of 16.49GW from January to November announced by the National Energy Administration in the early stage, and the cumulative installed capacity of household photovoltaics in 2021 was about 21.5GW, a year-on-year increase of 112%.
This year, China's whole county promotion, large bases and other policies have been launched, Fu Honghao expects that the annual household installed capacity will exceed 20GW, and the potential installed capacity of the whole county can contribute to the whole county in the future is 30-50GW.
Since the forecast for the photovoltaic industry is so optimistic, will the photovoltaic industry have the previous "overcapacity" situation?
According to the data, since the end of October 2021, the new silicon material production capacity has been put into production, corresponding to an annual production capacity of about 135,000 tons, corresponding to a monthly new supply of more than 11,000 tons. Since December last year, the industry's silicon supply has shown a significant increase, according to the statistics of the Silicon Industry Branch, from November to December 2021, the monthly output of domestic silicon materials was 42,110 and 48,800 tons, and the supply increase in December was 0.67 million tons, an increase of 15.91% month-on-month. After entering January 2022, with the gradual full production of new production capacity, it is expected that the supply of silicon materials will continue to increase.
Huaxin Securities research report predicts that the production of silicon materials that can be supplied will increase to nearly 850,000 tons in 2022. The effective capacity of silicon materials in 2021 is about 580,000 tons, and it will increase by about 47% year-on-year in 2022.
From the perspective of silicon material, silicon wafer, cell and module, once the upstream silicon production capacity of the photovoltaic industry continues to increase, it is bound to affect the price of silicon wafers, thereby affecting the downstream installed capacity.
Li You, manager of the industrial cycle fund of Chuangjin Hexin, believes that the new energy industry, including the photovoltaic industry, is a surplus industry in the long run, because new energy to replace traditional energy, can not be through price increases, must be through the fall in costs, the decline in prices to stimulate the demand of the industry. If production capacity is always tight and prices are always rising, then there is no substitute for traditional energy. Only through the relative surplus of the industry, the price slowly goes down to replace the traditional industry.
On the whole, the price increase of silicon materials and wafers this year belongs to the rebound caused by short-term supply and demand mismatch, and the price decline is an inevitable trend, which will promote the growth of downstream installed capacity. In the case of the downward price of the industrial chain, the demand for photovoltaics in 2022 may exceed expectations, and in the medium and long term, driven by the trend of carbon neutrality and the economy of the industrial chain, the photovoltaic industry still has high growth potential.
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