SHANGHAI, Jan 4 (SMM) - According to SMM survey, as of January 4, domestic silicon wafer prices continued to decline. Taking the mainstream 182mm silicon wafer as an example, its lowest price has dropped to 3.4 yuan/piece, compared with 7.21 yuan/piece at the end of November, a loss of 52.8%.
SMM believes that the core reason for the collapse of domestic silicon wafer prices is sluggish demand at the end of 2022. Since December, due to the impact of labour shortages amid surging pandemic, and high terminal costs, power station projects slowed down or were stalled. In the last week before New Year's Day, the bid winning volume of solar modules was only 290MW, the lowest in 2022. At the same time, the production schedule of module companies declined significantly. In December, domestic module production was about 24GW, a decrease of 27.3% from November. Falling end demand led to severe build-up of silicon wafer inventory, which exceeded 1 billion pieces by mid-December. In order to seize the market, first-tier enterprises kept reducing prices, intensifying the price war.
In addition, the collapse of market sentiment and the pessimistic expectations for January also led to a drop in silicon wafer prices. Most downstream enterprises restocked as needed, and will not make purchases if they lack orders, no matter how low the prices may be. Influenced by poor orders and high costs, a leading enterprise in Xinjiang has planned to suspend operations for the whole month in January.
Where is the bottom of the market? SMM believes that the overall market will still be going down in January. With the release of photovoltaic production capacity, the market will inevitably head for a surplus in 2023. The current severe imbalance between supply and demand is partly caused by pandemic and seasonal effects. After January, with the end of the Chinese New Year and passing of the peak period of COVID infections, downstream production will recover. In the first quarter, after the leading integrated enterprises draw down their inventories to normal levels, silicon wafer prices will gradually stabilise and even have the possibility of a slight rebound.
