Solar wafer prices stable, possible price increases loom due to changes in trade policy – ​​pv magazine USA

December 2, 2024
OPIS

FOB prices for mono PERC wafers in China remained stable this week, with prices for mono PERC M10 and G12 wafers at $0.138/pv and $0.196/piece, respectively. Likewise, FOB prices in China for n-type M10 and G12 wafers showed no weekly changes and remained stable at $0.132/piece and $0.178/piece, respectively.

According to reports, the production of M10 wafers is done on a custom order basis without continuous inventory, which ensures relatively better profit margins compared to G12 wafers.

Amid widespread large-scale production cuts by Chinese wafer makers, reports emerged this week of a partial recovery in operating rates at certain wafer fabs. Industry insiders attribute this recovery in part to module manufacturers accelerating production material procurement to improve their production and sales performance for 2024.

In addition, according to the revised guideline “Normative Conditions for the Photovoltaic (PV) Manufacturing Industry” issued by China’s Ministry of Industry and Information Technology (MIIT) in July 2024, qualified solar manufacturers must achieve an actual annual production output of at least 50% of their production capacity for the same year. Insiders suspect that producers with persistently low operating rates may need to accelerate their production this year, as failure to meet this requirement could harm their future development prospects.

In the solar manufacturing market outside of China, only one integrated manufacturer in the US is reportedly close to producing its ingot project. All other announced ingot projects have yet to begin construction, which is why industry insiders believe that these projects are unlikely to reach production within the next two years due to the significant funding and complicated technological processes required for ingot production.

The international trade landscape faces further challenges with China’s decision to reduce export tax rebate on solar products, including wafers, from 13% to 9% effective December 1. Market participants are therefore expecting a possible price increase for export orders for Chinese waffles in the near future.

This policy is not expected to have a material impact on demand for export wafers as China remains the world’s leading supplier and no viable alternative sources are currently available. However, both wafer sellers and buyers acknowledge that negotiating price increases remains a challenging process. The price fluctuation of 4% represents a significant burden for manufacturers and customers, especially in the ongoing market downturn.

Sources believe it is unrealistic to expect customers to accept a 4% price increase overnight, noting that the specific pricing strategy remains under discussion. A gradual approach to price adjustments, especially for long-standing and stable customers, is currently being considered.

For orders whose prices have already been determined and delivery is scheduled after December 1, wafer suppliers are also actively exploring the possibility of renegotiating prices with customers. Alternatively, some companies have adopted the strategy of quickly booking cargo space and sending shipments through customs before December. However, this approach has limitations as early delivery depends on whether the customer’s location can accommodate it and whether it would incur additional storage costs for the customer.

OPIS, a Dow Jones company, provides energy prices, news, data and analysis on gasoline, diesel, jet fuel, LPG/NGL, coal, metals and chemicals, and renewable fuels and environmental goods. The company acquired pricing data assets from Singapore Solar Exchange in 2022 and now publishes the OPIS APAC Solar Weekly Report.

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