Faced with sluggish demand in the Europe market, solar-cell clients plan to cut their output and demanded price cuts. The trend seems to have started affecting the quotes for upstream PV silicon wafers, as demand for solar wafers has dropped. Spot-market quotes for solar wafers have slackened, including 6-inch polysilicon wafers whose quotes now stand at US$3.7. Although some Taiwan wafer firms still avoid cutting their prices, increase in quotes is unlikely.
Quotes for silicon wafers remained solid in the first several months of 2011 due to strong demand. But in recent two weeks, their quotes in the spot market have begun to decline. Channel players are actively seeking orders, with large leeway for price negotiation. Spot price for 6-inch polysilicon wafer could be settled at US$3.5 per unit, down 3% from US$3.7 originally.
Industry sources noted that solar-cell firms previously had actively placed orders in order to secure sufficient inventory for their expanded capacities, leading to serious shortage. Unable to fulfill demand, channel players had tended to avoid meeting clients, the sources claimed. But the situation seems to have started to change.
Price cuts have been more obvious among Chinese suppliers. Following its previous pledge not to increase price for long-term contract clients, a first-tier Chinese supplier reportedly may cut its prices further in April. Long-term contract price for 6-inch polysilicon wafers could reach only US$3 apiece, a sharp contrast to the level in March, when its spot-market price hit US$4. Apparently, under the market status, prices are unlikely to increase in April.
Industry insiders noted that due to different client structures and strategies, some Taiwan solar wafer firms may shy away from the strategy of price cut. Therefore, there will be different quotes for different brands on the spot market.
Some suppliers have actually promised clients to cut their quotes for April. Quotes vary according to different wafer thickness, guaranteed level of conversion efficiency, and even the status of brands. Due to their lesser extent of capacity expansion, silicon wafers can still maintain high capacity utilization rates.
Should solar-cell firms materialize their plans to cut output, demand for silicon wafers would plunge. Industry insiders noted that if silicon wafer suppliers refuse to cut prices, solar-cell firms may only place minimum amount of orders specified in their contracts or ask for deferred shipments, while increasing procurement from those willing to cut prices.
Major Taiwan PV wafer firms include Sino American Silicon Products (SAS), Green Energy, Danen Technology, and Eversol, while major China-based firms include GCL and LDK Solar.
Article translated by Philip Liu
