On August 27th, according to Caixin, after a prolonged period of declining prices in the photovoltaic industry chain, it finally received news of an upward adjustment. A reporter from Caixin learned today from Longi Green Energy (601012.SH) that the company officially raised its prices, with the N-G10L priced at 1.15 yuan/piece and the N-G12R at 1.3 yuan/piece, representing an average increase of 5 fen/piece.

At the same time, another silicon wafer leader TCL Zhonghuan (002129.SZ) publicly raised the prices of silicon wafers, with G10 N at 1.15 yuan/piece, G12R N at 1.3 yuan/piece, and G12N at 1.5 yuan/piece. After the price adjustment, the product prices are basically consistent with those of Longi Green.

Regarding the reason for this price adjustment, a representative from Longi Green Energy explained to a reporter from Caixin that the adjustment is aimed at driving the industry out of the quagmire of low-price competition and back to a healthy competitive environment.

Actual transactions are still to be observed.

Since the fourth quarter of last year, under the phase of mismatched supply and demand, prices at various stages of the silicon wafer industry have continued to grind lower. As for whether this price adjustment means that the "price war" has temporarily ended, many in the industry hold a cautious view. Fang Wenzheng, a photovoltaic analyst with Longi Information, told a reporter from Caixin that the G10L size is 182 * 183.75mm, which is a relatively mainstream size for downstream battery components, and therefore has relatively better demand.

It is reported that Longi's latest price policy will take effect on August 29th. Fang Wenzheng believes that the price adjustment by the leading silicon wafer manufacturers is guiding, and after Zhonghuan reduced its production load, there has been some reversal in the overall silicon wafer inventory. Other leading silicon wafer manufacturers have plans to follow the adjustment, but the actual transaction situation still needs to be observed by downstream battery factories.

From the demand side, Longi's price adjustment at this time tests the ability of downstream acceptance. According to Jibang Consulting's news this month, the battery cell segment is in a stage of stagnation, reorganization, and clearance, and the overall purchasing power is not optimistic. Integrated manufacturers' battery production has significantly reduced, and the demand for previous silicon wafer outsourcing and OEMs is somewhat tired.

According to the statistics of the Silicon Industry Branch last week, silicon wafer prices are still falling. Specifically, the average transaction price of N-type G10L monocrystalline silicon wafers fell to 1.08 yuan/piece, a month-on-month decrease of 6.5%; the average transaction price of N-type G12R monocrystalline silicon wafers remained at 1.25 yuan/piece; the average transaction price of N-type G12 monocrystalline silicon wafers fell to 1.5 yuan/piece, a month-on-month decrease of 6.25%.

In the analysis, it is mentioned that the further decrease in battery prices has an impact on the expectation of stabilizing prices for silicon wafer companies, and it is explained that the bargaining power in the silicon wafer sector is not strong. It was previously reported that another leading silicon wafer factory, TCL Zhonghuan, began to lower its silicon wafer production rate last week. Industry insiders predict that the reduction in load by leading companies will provide some support for future silicon wafer market prices.

According to a person from a listed company interviewed by Caixin, many silicon wafer manufacturers such as Longi have already intended to raise product quotes. However, the terminal market conditions have always been unfavorable, making it difficult to have the conditions for price increases. The reduction in production rate by Zhonghuan, combined with the expectation of reduced upstream output due to power restrictions in Sichuan, presents an opportunity for a trial price adjustment.

Has the 'internal conduction' of prices ended?

Caixin reporters noticed that the price updates this time have not been officially announced through official channels. The most recent price release on the Longi Green Energy official website was on December 26, 2023, with the P-type M10 monocrystalline silicon wafer (150μm thickness) (182.2*182.2φ247mm) priced at 2.20 yuan, the N-type M10 monocrystalline silicon wafer (130μm thickness) priced at 2.35 yuan, and the N-type M11 monocrystalline silicon wafer (130μm thickness) priced at 2.55 yuan.

Through two comparisons, it can be seen that in the past nearly nine months, Longi's silicon wafer products have seen a price reduction of over 50%. The TCL Zhonghuan WeChat public account shows that the most recent price update was on September 26, 2023, and it has been 11 months since then. At that time, the N-type 182-size (130μm) silicon wafer was priced at 3.20 yuan/piece, while the 210-size was priced at 4.20 yuan/piece.

The impact of low-priced products is reflected in the financial reports. The latest interim report from TCL Zhonghuan shows that the company's silicon wafer revenue in the first half of the year was 10.432 billion yuan, a decrease of over 60% year-on-year, accounting for 64.34% of the total revenue. The gross margin of this business was -9.25%, a year-on-year decrease of -34.13%. Longi Green Energy expects a net loss of 4.8 to 5.5 billion yuan in the first half of the year.

Industry analysis believes that although the third quarter is already half over, leading manufacturers still face significant pressure on annual shipments and net income. Regarding the annual expectations, Fang Wenzheng believes that from the perspective of capacity clearance pace, there are no clear signs of a significant price reversal this year.

He told the Caixin journalist that currently the production rate of slicing process is relatively low, but it is only a production cut. In the future, if the price situation of silicon wafers improves and the price of silicon wafers increases, then the probability of silicon wafer factories adjusting their production rate will increase, which will lead to a new wave of stock accumulation. Before the capacity reduction is completed, various links such as silicon wafers will still tend to adopt a low-price grabbing strategy.