Solar wafer prices, which have fallen due to oversupply over the past few years, have recently risen slightly. Analysts say that the solar industry is a sign of a rebound after hitting a low point.
According to Bloomberg News and Chinese media iKai Global on Monday, the prices of N-type G10L and G12L wafers increased from 1.1 yuan to 1.15 yuan and 1.25 yuan to 1.3 yuan, respectively. Announcing the price hike, the company said it will lift the industry out of the quagmire of low-cost competition. TCL also slightly increased the prices of G10N, G12RN, and G12N wafers.
Energy Trend, a media outlet specializing in renewable energy, analyzed, “Wafer prices remained stable this week as two leading companies in the industry showed signs of price hikes, and the second-largest manufacturers tended to follow suit.”
China’s solar industry grew rapidly in the 2010s with the full support of the government, but it is suffering from oversupply. According to Taiyang News, a solar market research company, the average price of N-type 182 millimeter (mm) wafers was 1.15 yuan per unit on the 30th of last month, down 50% from the previous year.
The trade dispute has also blocked the export routes to the U.S. and Europe. The Biden administration has decided to raise tariffs on Chinese solar cells from 25 percent to 50 percent while subsidizing solar panels produced in the country through the Inflation Reduction Act. The European Union has also strengthened financial support for solar panel manufacturers in the region and conducted anti-subsidization surveys on Chinese solar products.
Yonggi Silicon Materials, which had a net profit of 9.3 billion yuan in the first half of last year, turned into a net loss of 5.2 billion yuan in the first half of this year. TCL Jung-hwan and Tongwei each recorded a loss of 3.1 billion yuan, while JA Solar Technology, Xinjiang Daco New Energy, and GCL Technology also suffered losses. “The solar power sector will not recover soon due to severe overproduction,” Yonggi Silicon Chairman Zhong Baoshen said on the 26th last month. “This year will be a very difficult year.”
As solar manufacturers are in a financial crisis, there are signs of restructuring in the industry. On the 13th of last month, Tongwei announced that it plans to spend about 5 billion yuan to secure more than 51 percent of its competitor Jiangsu Energy. Goldman Sachs diagnosed that “a factory shutdown is imminent that can help rebalance the market.”
SOPHIA KIM
US ASIA JOURNAL
