Silicon wafer prices have plunged over the past few weeks as manufacturers passed on savings on raw materials to their customers amid a looming glut in China’s solar panel supply chain, industry data show.
On Wednesday, the average prices of two key types of wafers each fell by 10% or more in the past week, according to data from InfoLink Consulting LLC, a consultancy. Their prices were down 18% and 24.6% respectively from a month before.
Wafer-makers have slowed production as their inventories have grown, analysts at China Non-Ferrous Metals Industry Association said in a Wednesday note. Domestic demand has also weakened, dragging down prices along the industrial chain.
The share price of Longi Green Energy Technology Co. Ltd. (601012.SH), a major photovoltaic (PV) materials producer, dropped 6.28% on Thursday. The company said on Shanghai Stock Exchange’s Q&A platform that falling material prices would reduce costs for downstream PV panels, thus boosting the demand for them.
China, by far the world’s largest producer of solar panels and components, is facing a glut of PV materials as recent capacity expansions all along the supply chain look set to outstrip demand, several analysts said.
Polysilicon, the main raw material used to make wafers and then PV panels, will be in “severe oversupply” in 2023, the analysts said. Its average price has dropped 15.6% over the past month in China, Infolink data show.
Related: Unrestrained Investment Creates Looming Glut for China’s Solar Supply Chain, Analysts Say
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
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