Caixin Media reported on August 27th (by Liu Mengran) that the continuously declining prices of the photovoltaic industry chain have finally received news of an increase. Caixin reporters learned today from Longi Green Energy Technology (601012.SH) that the company has officially raised its prices to the public, with the N-G10L priced at 1.15 yuan/piece and the N-G12R priced at 1.3 yuan/piece. The average price has been raised by 5 fen/piece.

At the same time, TCL Zhonghuan Renewable Energy Technology, another leading wafer manufacturer, raised its prices to the public. The G10 N is priced at 1.15 yuan/piece, the G12R N is priced at 1.3 yuan/piece, and the G12N is priced at 1.5 yuan/piece. After the price adjustment, the product prices are basically the same as those of Longi.

Regarding the reason for this price adjustment, representatives from Longi Green Energy Technology stated to Caixin reporters that the price adjustment in the wafer industry aims to push the industry out of the low-price competition quagmire and return to a healthy competitive environment.

Actual transactions are still to be observed.

Since the fourth quarter of last year, under the phase of supply and demand mismatch, the prices of wafers and other links have continued to grind lower. As to whether this price adjustment means the temporary end of "internal competition", the industry holds a cautious view. Fang Wenzheng, a photovoltaic analyst at Longzhong Information, expressed to Caixin reporters that the G10L size, measuring 182*183.75mm, is a relatively mainstream size for downstream battery modules, and relatively speaking, the demand is better.

It is reported that Longi's latest price policy will take effect on August 29th. Fang Wenzheng believes that the price adjustment of leading wafer manufacturers has a guiding significance, and after Zhonghuan reduced its operating load, there has been a certain reversal in the overall inventory of wafers. Other leading wafer manufacturers also have plans to follow the adjustment, but the actual transactions still need to be observed in terms of acceptance by downstream battery manufacturers.

From the perspective of demand, Longi's current price adjustment will put more pressure on the acceptance by downstream companies. According to data from Jibang Consulting this month, the battery cell segment is currently in a stagnant reorganization and clearance phase, and the overall purchasing effort is not optimistic. The integrated manufacturers' battery production has significantly reduced, and the previous external procurement and contract manufacturing demand for wafers is somewhat tired.

According to the statistics of the silicon industry subcommittee last week, the price of silicon wafers is still on the decline. Specifically, the average transaction price of N-type G10L monocrystalline silicon wafers has fallen to 1.08 yuan/piece, with a 6.5% decrease compared to the previous period; the average transaction price of N-type G12R monocrystalline silicon wafers remains at 1.25 yuan/piece; the average transaction price of N-type G12 monocrystalline silicon wafers has fallen to 1.5 yuan/piece, with a 6.25% decrease compared to the previous period.

The analysis mentioned that the further decline in battery prices has impacted the expectation of stable prices for silicon wafer companies and indicated that the current bargaining power in the silicon wafer segment is weak. Asia Financial News reporter previously learned that another leading silicon wafer factory, TCL Zhonghuan Renewable Energy Technology, began to reduce the operating rate of silicon wafers last week. Industry forecasts believe that the reduction in load by leading companies will provide some support for future silicon wafer market prices.

A person from a listed company told Asia Financial News reporters that many silicon wafer factories including Longi Green Energy Technology had long intended to raise product quotes, but the market conditions have remained pessimistic and it is difficult to justify a price increase. The reduction in operating rates by TCL Zhonghuan Renewable Energy Technology, combined with the expectation of reduced output due to power restrictions in Sichuan, presents an opportunity for a tentative price adjustment.

Has the 'internal wrapping' of prices ended?

Asia Financial News reporters noticed that the recent price updates have not been officially announced. The latest price release on the official website of Longi Green Energy Technology was on December 26, 2023, with monocrystalline silicon wafers P-type M10 (150μm thickness) (182.2*182.2φ247mm) priced at 2.20 yuan, N-type M10 130μm thickness at 2.35 yuan, and N-type M11 130μm thickness at 2.55 yuan.

Through two comparisons, it is evident that over the past nearly nine months, the prices of Longi's silicon wafer products have dropped by more than 50%. TCL Zhonghuan Renewable Energy Technology's WeChat public account shows that the most recent price update was on September 26, 2023, marking an 11-month gap. At that time, their N-type silicon wafers 182 size (130μm) were priced at 3.20 yuan/piece, while the 210 size was at 4.20 yuan/piece.

The impact of low-priced products is reflected in the financial reports. TCL Zhonghuan Renewable Energy Technology's latest interim report shows that the company's silicon wafer revenue was 10.432 billion yuan in the first half of the year, a decrease of over 60% year-on-year, accounting for 64.34% of the total revenue. The business gross margin was -9.25%, a year-on-year decrease of -34.13%. Longi Green Energy Technology is expected to incur a net loss of 4.8 billion yuan to 5.5 billion yuan in the first half of the year.

Industry analysts believe that although more than half of the third quarter has passed, leading companies still face significant pressure on full-year shipments and net income. Regarding the full-year forecast, Fang Wenzheng believes that based on the pace of capacity clearance, there are no clear signs of a significant price reversal this year.

He told Caijing reporters that the current slicing link has a relatively low start-up rate, but it is just a production reduction. In the future, if the price situation improves, monocrystalline silicon is likely to increase in price, then the silicon wafer factory will probably adjust the start-up rate, leading to a new wave of stockpiling. Before the capacity reduction is completed, various links such as silicon wafers will tend to adopt a low-price bidding strategy.