On August 27, the two leading silicon wafer companies simultaneously released news of price increases.

It is reported that Longi Green Energy has adjusted the prices of silicon wafers. The price of N-G10L is 1.15 yuan/piece, and the price of N-G12R is 1.3 yuan/piece. The new average price has been increased by 5 cents/piece.

Today (August 27), a reporter from the Star Daily called Longi Green Energy Securities Office as an investor. The staff member stated, 'The previous price of silicon wafers fell below the cash cost. In order to ensure the long-term healthy development of the market, the company has adjusted the price of silicon wafers.'

On the same day, TCL Zhonghuan Renewable Energy Technology also announced a price increase for silicon wafers. The adjusted price of G10N is 1.15 yuan/piece, the price of G12RN is 1.3 yuan/piece, and the price of G12N is 1.5 yuan/piece. TCL Zhonghuan responded to the reporter from the Star Daily, saying, 'The situation is true. The company believes that price adjustment is beneficial to the overall development of the industry and hopes that the photovoltaic industry can emerge from the current low-price competition dilemma.'

As of the time of publication, the price adjustment of the above two parties has not been officially announced. The silicon wafer prices on Longi Green Energy's official website still remain as of December 26, 2023, and TCL Zhonghuan's prices remain as of September 26, 2023.

Regarding the news of price adjustments, Lü Jinbiao, Secretary-General of the SEMI China Photovoltaic Standard Committee, stated in an interview with the Star Daily, 'The price of silicon wafers is returning to a reasonable value. After the price previously fell below the cash cost, the leading companies reduced supply by lowering the load, thus stopping the price decline. 'TCL Zhonghuan has always followed Longi Green Energy, but this time under the low price, it is maintaining a high load. TCL Zhonghuan is losing more than Longi Green Energy.'

What are the trends of various companies in the industry chain?

After the adjustment of silicon wafer prices by the two leading companies, will other manufacturers follow suit? Can the profitability of manufacturers in the silicon materials, solar cells, and components sectors be restored?

Today (August 27th), personnel from Guangdong Quanneng, a manufacturer in the silicon materials sector, told reporters from the Star Daily, "The price mainly depends on the company's situation and production schedule. We haven't seen the direct impact of the increase in silicon wafer prices yet, and we still need to analyze it further."

Tongwei Co., Ltd. stated that the clearance of production capacity is still ongoing and the photovoltaic industry is improving. "Currently, the prices of products in the entire industry are below cost. Theoretically, reducing production capacity should lead to a price rebound, but it depends on the extent of the reduction and the specific demand situation. The supply-demand situation has not shown a significant improvement yet."

As for whether the company will raise the prices of its products, personnel from Tongwei Co., Ltd. stated that the company follows the market and the quotes from Longi Green Energy may not necessarily reflect the current situation.

Jingang Solar stated to the Star Daily, "The company mainly purchases silicon wafers from TCL Zhonghuan Renewable Energy Technology. If the prices of silicon wafers increase in the future, the prices of the company's solar cells will also increase accordingly. Currently, the company's capacity utilization rate is low, and the industry as a whole has low capacity utilization rates."

"To maintain production even when prices are below cost, reducing production or stopping production would result in higher costs for equipment infrastructure and labor, leading to greater losses." Regarding price trends, the personnel added, "It is difficult to predict future price trends and make judgments based solely on one price adjustment. The development and changes in the photovoltaic industry are happening too fast."

There may be a phenomenon of capacity rework. Silicon materials and component companies are stabilizing and the downward trend is stopping.

Looking at the overall trend of the photovoltaic industry, Lv Jinbiao, the Secretary General of the SEMI China Photovoltaic Standards Committee, analyzed to reporters from the Star Daily, "In the future, all companies should reduce their production capacity proportionally, especially the leading companies, which should play a regulatory role. The ones that suffer the most from the price competition are the high-load leading companies. In the case of excess high-quality production capacity in each link, low-price competition among leading companies can force their counterparts to stop, but it is difficult to achieve a complete clearance of production capacity."

However, Lv Jinbiao also further stated that after the reduction of load and the reduction of supply to promote the rebound of prices, there will be a phenomenon of capacity return work, which restricts further price increase.

Since 2023, the photovoltaic industry has encountered unprecedented challenges, and the profitability of various links in the industrial chain has been under continuous pressure, with the performance of photovoltaic manufacturers generally declining. Longi Green Energy is expected to have a net loss of 4.8 billion yuan to 5.5 billion yuan in the first half of the year; TCL Zhonghuan Renewable Energy Technology has a loss of over 3 billion yuan in the first half of the year, with a gross margin of -9.25%, a year-on-year decrease of 34.13 percentage points.

Currently, in addition to seeing the "dawn" on the silicon wafer side, Lv Jinbiao also revealed that there are signs of adjustment on the silicon material side.

According to the quotation on August 21, 2024 from TrendForce's New Energy Research Center, the price of single-crystal recycled material is 34 yuan/KG, the latest price of single-crystal dense material is 32 yuan/KG, and the price of N-type material is 38 yuan/KG. Compared with the previous week, the price has stabilized and stopped falling.

In other aspects, the quotation for M10 monocrystalline PERC solar cells, G12 monocrystalline PERC solar cells, and G12 monocrystalline TOPCon solar cells have all stopped falling. The quotation for M10 monocrystalline TOPCon solar cells has decreased by 3.51%, and the quotation for G12R monocrystalline TOPCon solar cells has decreased by 3.45%; modules and photovoltaic glass have all stopped falling.

Analyst Zhu Yue of China Securities Co., Ltd. believes that the photovoltaic sector is at the bottom of the fundamentals and profits, but positive marginal changes are occurring recently. On the one hand, domestic projects are gradually starting to be delivered in August, and it is expected that the production of modules from September to November will continue to increase, and there will be marginal improvement in industry demand; on the other hand, the bottom of the industry chain's profitability is becoming more clear, and the improvement of industry supply is accelerating.

From the demand side, Yang Runsi, an analyst at Guosheng Securities, said that the government has introduced a series of policies to support photovoltaic power generation and solve consumption problems. In addition, centralized procurement bidding is hot, and the scale of public bidding for photovoltaic modules in the first half of 2024 exceeded 172GW, an increase of 40% compared with the same period last year. It is expected that the bidding situation in the second half of the year may reach a new high, and the installation potential brought by the large-scale base of wind and solar power will open a new round of photovoltaic demand cycle.