After the US announced its preliminary rulings on CVD and AD duties, momentum in the market has turned weak. Module and cell makers have decreased capacity and increased inventory, and in order to reduce operating pressure, hope to stimulate the market through price adjustment. Thus, PV cell and module price quotes have declined significantly, which has led to upstream wafer and polysilicon price adjustment as well, according to EnergyTrend.
"Wafer makers currently face difficulties, as they have to try to fulfill contracts requested by polysilicon makers and yet meet price-cutting demand from downstream clients," said Arthur Hsu, research manager of EnergyTrend."
Wafer prices have been adjusted since August 2014 and may decline further in the future. High-efficiency wafer price quotes for first-tier makers have reached US$0.90-0.92/piece and US$0.86-0.88/piece for second-tier makers, indicated EnergyTrend.
On the other hand, Taiwan wafer makers have actively increased their OEM ratio to fill the unused capacity caused by the weak demand. In the meantime, wafer prices have started to drop below makers' break-even point. "The break-even point was at US$0.54/piece for first-tier makers and around US$0.56/piece for second-tier makers. Certain OEM quotes even approached US$0.50/piece, down 10% compared to the break-even point. It will bring substantial impact to makers' profits if they continue to raise OEM ratio. Yet, the high raw material costs caused manufacturing costs to remain high. That's why wafer makers can't adjust prices according to market changes," added Hsu.
The industry is optimistic about second-half 2014 as demand in China and Japan will increase significantly. EnergyTrend said it estimates that more orders will be placed in the fourth quarter of the year, and rumor has it that polysilicon makers may revise contract prices upward to US$24-25/kg. But since no compromise has been reached yet for both buyers and sellers, prices within the contract market may continue to diverge in the short run, the firm added.
