Silicon Prices Drop Down To CNY 180/kg

• According to TrendForce, silicon prices have been coming down across the value chain as silicon producers ship out their inventory
• Prices are likely to keep dropping in the months of April and May this year, however 210 cells are in less supply hence more expensive than 182 cells
• Transaction price of solar modules hovers around RMB 1.75/W which is expected to drop down to RMB 1.6/W

As silicon producers ship out more of their inventory to make way for more to come up thanks to their expanding production capacity, wafer manufacturers are struggling to absorb this excess inventory, and this is bringing down prices across the value chain, a trend that's likely to continue in April and May, says TrendForce.

Lowest quoted price for silicon has gone down to CNY 180 ($26.10)/kg, while average market transaction prices are hovering around CNY 190 ($27.56)/kg. For wafer, the analysts see overall transaction prices beginning to return to normal levels, but say that 'despite the accelerated growth in production capacity and the ongoing decline in silicon prices, silicon wafer prices may fall'.

For solar cells, growth in operation rate and new capacity coming online, the utilization rate has been high in April. Availability of 210 cells is tight hence these are more expensive than 182 cells.

When compared with p-type, production for n-type cells remains limited, leading to a significant price difference. By the end of April, TrendForce expects a significant price decline for cell prices, primarily due to continuous decrease in polysilicon prices, loosening of silicon wafer prices and efforts of module makers to cut costs.

"The profit margin for solar modules has been largely diverted to the silicon wafer and cell segments—despite the price of silicon falling below RMB 200 ($29.0)/kg—resulting in little change in the transaction price of solar modules at around RMB 1.75 ($0.25)/watt. However, some suppliers have dropped prices to below RMB 1.7/watt in an effort to boost sales," state the analysts.

Going forward, TrendForce expects solar module prices to return to normal levels by Q3 at an estimated price of around RMB 1.6 ($0.23)/W.

Silicon prices have been on the downhill for quite some time now resulting in a chain reaction across the value chain, however TrendForce had earlier said there remains a considerable degree of uncertainty in the PV market in 2023 as price fluctuations in China and government policies may change things (see Upstream Solar PV Prices Starting To Go Down).