Solar wafer prices stable, potential price hikes loom amid trade policy changes
FOB China prices for Mono PERC wafers remained stable this week, with Mono PERC M10 and G12 wafers priced at $0.138/pv and $0.196/pc, respectively. Similarly, FOB China prices for n-type M10 and G12 wafers showed no week-to-week changes, holding steady at $0.132/pc and $0.178/pc, respectively.
M10 wafer production is reportedly conducted on a customized order basis without maintaining continuous inventory, ensuring relatively better profit margins compared to G12 wafers.
Amid widespread large-scale production cuts by Chinese wafer companies, reports emerged this week of a partial rebound in operating rates at certain wafer factories. Industry insiders attribute this recovery in part to module manufacturers accelerating production material procurement to enhance their production and sales performance for 2024.
Additionally, under the revised Normative Conditions for Photovoltaic (PV) Manufacturing Industry guideline issued by China's Ministry of Industry and Information Technology (MIIT) in July 2024, qualified solar manufacturers are required to achieve an actual annual production output of at least 50% of their production capacity for the same year. Insiders suggest that producers with consistently low operating rates this year may need to accelerate production, as failing to meet this qualification could constrain their future development prospects.
In the non-China solar manufacturing market, only one integrated manufacturer in the U.S. is reportedly nearing production for their ingot project. All other announced ingot projects have yet to begin construction, leading industry insiders to believe it is unlikely these projects will achieve output within the next two years due to the significant funding and intricate technological processes required for ingot production.
The international trade landscape has encountered further challenges with China's decision to reduce the export tax rebate for solar products, including wafers, from 13% to 9%, effective December 1. As a result, market participants anticipate a potential increase in prices for export orders of Chinese wafers in the near term.
This policy is not expected to significantly impact demand for export wafers, as China remains the dominant global supplier with no viable alternative sources currently available. However, both wafer sellers and buyers acknowledge that negotiating price increases remains a challenging process. The 4% price fluctuation poses a considerable burden for both manufacturers and customers, particularly amid the ongoing market downturn.
Sources believe that it is unrealistic to expect customers to accept a 4% price increase overnight, noting that the specific pricing strategy remains under discussion. A gradual, step-by-step approach to price adjustments, particularly for long-term and stable customers, is currently being considered.
For orders that have already been priced and are scheduled for delivery after Dec. 1, wafer suppliers are also actively exploring the possibility of renegotiating prices with customers. Alternatively, some companies have adopted a strategy of hastily booking shipping space and rushing shipments through customs before December. However, this approach has limitations, as early delivery depends on whether the customer's site can accommodate it and whether it would incur additional storage costs for the customer.
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