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Silicon Wafer Giants Slash Prices Amid Production Surge: Market Stability in Question

TCL Zhonghuan and Longi, two leading firms in the photovoltaic silicon wafer sector, have slashed their product prices amidst a surge in production. These moves signal an ongoing struggle for price stability in the sector, as industry analysts grapple with the dynamics of supply and demand.

The latest data released by TCL Zhonghuan on July 9 revealed a steep reduction in the price of its monocrystalline silicon wafers, with decreases of 30% across its 150m thick P-type silicon wafers.

Longi Green Energy also significantly reduced its prices at the end of June, with a drop of 33% in its “monocrystalline silicon wafer P-type M10 150μm thickness”.

Analysts have attributed this drastic price cut to an oversupply in the market. An increased production levels in the context of high profits have led to a surfeit of silicon wafer inventories, peaking at close to 2 billion pieces in May. This resulted in the collapse of silicon wafer prices as smaller companies were forced to reduce prices due to high cost pressures.

Yet there are indications that the downward spiral may be slowing. As of July 10, the price of monocrystalline silicon wafer M10-182mm (150μm) held steady averaging 2.82 yuan/piece ($0.43).

Meanwhile, the decline in polysilicon prices has narrowed considerably, with the raw material currently quoted at 62.5 yuan/kg ($9.60).

Despite this, there are concerns that the sector may once again be flooded with surplus supply, as multiple first-tier firms plan to ramp up production in July. Experts estimate that industry supply may increase by approximately 20%, leading to potential further price reductions.

However, there is also a potential for price support for silicon wafers in September, following the completion of a significant ramp-up in cell production. In addition, the end-of-year advance purchasing in the fourth quarter may cause a slight rebound in the prices of silicon materials and wafers.

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