In recent developments within the global photovoltaic (PV) industry, the prices of solar wafers have exhibited stability, indicating an improving balance between supply and demand. According to a weekly update by OPIS, a Dow Jones company, there have been notable trends in the pricing of various wafer types.
As of October 7, 2024, FOB China prices for solar wafers have remained consistent. Specifically, the prices for Mono PERC M10 and n-type M10 wafers are holding steady at $0.145 per piece and $0.143 per piece, respectively. Similarly, prices for Mono PERC G12 and n-type G12 wafers have not changed, remaining at $0.211 per piece and $0.200 per piece, respectively. This stability in pricing is a positive sign for manufacturers and investors alike.
One of the key factors contributing to this stability is the improving supply-demand balance in the wafer market. Recent data from the Silicon Industry of China Nonferrous Metals Industry Association indicates that wafer production in China experienced a significant decline in September, with output reaching 44.31 GW. This figure represents a month-on-month decrease of 15.76%, suggesting that manufacturers have been adjusting their operating rates in response to market conditions.
Interestingly, the trend of lower operating rates among wafer producers appears to be ongoing. During the China Golden Week holiday in early October, reports emerged that several wafer manufacturers reduced their production shifts from the usual three shifts per day to a mere one shift. This reduction in production capacity reflects a cautious approach by manufacturers as they navigate the current market challenges.
While industry experts agree that wafer prices may have reached their lowest point and are beginning to show signs of intermittent rebounds, the path to increasing prices is fraught with challenges. One significant concern is the potential for integrated manufacturers to ramp up their own wafer production in response to rising prices, which could lead to a decrease in demand for externally supplied wafers. Additionally, smaller factories may seize the opportunity to restart operations, further complicating the market dynamics.
Another critical issue impacting the wafer market is the weak downstream demand for solar installations. China’s ambitious 14th Five-Year Plan aimed to achieve a combined solar and wind capacity of 1,200 GW by 2030. Remarkably, this target was met six years ahead of schedule, having been achieved by July of the current year. However, industry insiders express concerns that future growth in solar installations may plateau, with an anticipated annual growth rate of approximately 10% under optimistic scenarios.
In the global context, recent weather events have also introduced complications. A hurricane that struck North Carolina has impacted a mining area known for producing high-purity quartz (HPQ), a crucial material for wafer manufacturing. Reports indicate that a major HPQ supplier was forced to temporarily halt operations due to power outages and damage to infrastructure. While some sources believe that the overall impact of this disruption is manageable, there are growing concerns that the supply of HPQ could be affected, potentially leading to increased wafer costs or a decline in wafer quality if manufacturers turn to lower-grade quartz substitutes.
As the solar industry continues to evolve, the interplay of production rates, pricing strategies, and external factors such as natural disasters will play a crucial role in shaping the future of solar wafer manufacturing. Stakeholders in the PV industry are closely monitoring these developments as they navigate the complexities of the current market landscape.
