Renewable Price Tracker – February 2024
- Polysilicon price still hovering near 1-year low
- Shakeout continues in solar midstream (wafer, cell, modules), Wind turbine price weakness remains
- Majority of renewables’ price are yet to stabilize due to competition with a lot of players
- Prefer solar glass, the price is stabilized, thanks to more rational competition as two major players already dominate c.50% market, smaller players are being squeezed out.
*Prices as of February 5th, 2023
Source: Shandong Longzhong Information Technology Co., Ltd. via CEIC ????????????, Sublime China Information, ?????????? DBSHK Calculations
Polysilicon: Polysilicon prices have declined c.68.1% y-o-y, staying near 1-year low of c.Rmb59/kg (previous low July 2023: Rmb65/kg).
Our view: Polysilicon prices are largely flat m-o-m. From our channel check, we understand that N-type adoption is occurring more rapidly than our expectation. Since N-type raw material has more stringent quality requirements, N-type adoption could speed up the shakeout of weaker players in the polysilicon segment.
Polysilicon price
Wafer: Wafer prices have declined c.39.7-50.8-% y-o-y. The largest format G12 (210mm) wafer ASP stabilized m-o-m at Rmb2.9/piece. Margins of 210mm wafers have softened to c.44% from c.65% in mid-July. For 182mm wafers, ASP rose 10.8% m-o-m but down c.61.5% y-o-y. Margins of 182mm wafers fell to c.41% from c.54% in mid-July.
Wafer price
Wafer margin
Note: calculated as (wafer ASP-polysilicon ASP)/wafer ASP
Cell: Cell prices fell c.36%-59% y-o-y. TOPCon cells have c.Rmb0.09/watt premium compared to 182mm PERC cells, flat m-o-m. Cell prices were flat m-o-m. Margins of 182/210mm cells fell from the recent high c.50%/50% in July 2023 to c.31%/29% in early February 2024.
Cell price
Cell margin
Note: calculated as (cell ASP-wafer ASP)/cell ASP
Module: Module prices have declined 23%-47% y-o-y. Module prices also declined by 0%-7.7% m-o-m. Module prices fell below c.Rmb1/w for larger formats, pressuring the revenues and profits of the entire silicon-based solar value chain. 210mm module assembly margins fell m-o-m to c.58%. The ASP of TOPCon modules had a Rmb0.04/watt premium compared to PERC modules, narrowing m-o-m.
Module price
Module assembly margin
Note: calculated as (module ASP- cell ASP)/module ASP
Our view (midstream wafer, cells, modules): Competition remains stiff among midstream players. We see more signs of a shakeout. Newcomers with no track record in solar component production are starting to cancel their plans to build facilities. The latest notable news is from Zhejiang Sunflower Great Health (300111.CH), a drug-maker. Sunflower cancelled its plans to build a 10GW TOPCon cell factory. We expect to see similar news of inexperienced players exiting the market in the coming months.
Solar glass: Solar glass price fell 1.9% y-o-y and was flat m-o-m. SCI surveys show China’s solar glass capacity reached c.97,280 tons/day as at Jan-2024, up c.30% y-o-y (Jan 2023: c.74,880 tons). Solar glass ASP remains relatively resilient among all the solar subsegments.
Solar glass price
Our view: Solar glass remains our most favored segment in the solar value chain. Flat Glass Group’s (FGG 6865 HK) H shares corrected c.17% from its 1-month high. Besides weakness in the overall HK/China equity indexes, we reckon the recent share price decline is related to the expiry of the lockup related to a previous share placement. We continue to like FGG as the preferred avenue to gain exposure to growing solar module installations.
Wind turbine: Wind turbine prices in China fell c.22% y-o-y and c.8% m-o-m to c.Rmb1,323/KW. Turbine ASP remains near their recent lows.
China wind turbine ASP
Our view: The turbine price decline has yet to show signs of turning around. We maintain our preference of wind power operators such as China Longyuan Power (CLYP 916 HK) over turbine makers like Goldwind (2208 HK).