Since November, the price of photovoltaic silicon wafers has been falling all the way, and photovoltaic stocks have entered a rapid decline in recent days. Third-party price platforms, silicon industry associations, and various big Vs all attribute the reason for the decline to the overcapacity of silicon wafers. Is this true?
In 2021, China’s cultivated land area will be 1.918 billion mu. China’s main grain production is mainly rice in the south, wheat and corn in the north. Among them, Yuan Lao’s hybrid rice yield can reach 1,500 kg per mu, and the double-crop harvest in the south is generally 1,000 kg per mu; corn in the northeast is about 600-700 kg The maximum yield of wheat per mu is 800 kg, generally 400-600 kg; if the average value is 700 kg, China’s staple food production capacity will be about 1.33 trillion kg, or 1.33 billion tons. China’s grain is not a problem.
However, in 2021, China’s total grain output will be 682.85 million tons, and another 164.54 million tons will be imported.
Therefore, production capacity and output are completely different things. The reason is that many of these production capacities are virtual: some land is degraded and is not worth growing food, which is ineffective production capacity; some high-yield rice fields are used to grow low-yield soybeans, which is inefficient production capacity; except for rural young people who work, many fields In idle state, this is idle capacity. Therefore, China’s grain output is only half of its production capacity!
Back to the photovoltaic industry, the self-media has given a lot of data to explain the surplus of silicon wafers. Let’s take a look at the statistical data of Blackhawk PV:
Note: The data of Black Hawk may be wrong: the installed capacity in 2021 should be 170GW, in 2022 it should be 245GW, and in 2023 it is expected to be 350GW.
Analyzing the data, we can draw some conclusions.
1. Production capacity has nothing to do with stock price trends
Overcapacity in silicon wafers, batteries, and components is a normal phenomenon. Considering production redundancy, the output of each link is not equal, it should be: silicon wafer>battery>component sheet.
The data in the table shows that the production capacity of the three links in 2020 and 2021 is far greater than the actual output, that is, surplus. However, the stocks of various companies in the photovoltaic sector have doubled in the past two years.
It can be seen that there is no correlation between production capacity and stock price.
2. The significance of silicon material production capacity is greater than that of other links
It can be seen from the data that the annual production of silicon materials is similar to the production capacity. The output in 2020 is not much different from that in 21, but the output of photovoltaic modules is quite different.
The reason is that the production of silicon materials is mainly industrial silicon purification, and the process is Si-SiHCl3-SiHCl4-reduction of Si, of which SiHCl3 and H2 need to be recycled and reused. After the production line is started, it is generally impossible to stop the production line, which will cause large economic losses. Therefore, with 20 years of excess production and the price of silicon materials falling below 60,000 yuan, manufacturers would rather make inventory than produce. Fortunately, the increase in demand in 21 years has digested the inventory of silicon materials.
Unlike the production of silicon materials, the production of silicon wafers, batteries, and modules is much more flexible, and the crystal pulling furnaces and production lines can be started and stopped at any time without any loss of raw materials. What is important in these links is product quality and sales capacity. Large production capacity can meet the demand when the demand peaks, rather than having to be full all the time. In fact, this year, the utilization rate of major polysilicon factories exceeds 100%, while other links can be called full production if they reach more than 85%. If the production capacity of silicon wafers is greater than that of batteries, it is inferred that there is a surplus of silicon wafers, which will lead to a price war for silicon wafers, either because they do not understand or have ulterior motives.
3. Up to now, silicon material production capacity and installed capacity demand are the key points of contradiction in the industrial chain
Oversupply of silicon materials in 20 years led to a decrease in silicon material capital expenditure. After the signing of the Paris Agreement in 21 years, terminal demand increased, silicon material production capacity was insufficient, and silicon material prices rose. In 22Q1, there was a rush for installation in India, the goose-black crisis, and a surge in demand in Europe. At this time, the expansion of silicon materials lagged behind the expansion of silicon wafers and batteries, resulting in a mismatch in the supply of silicon materials, and the price has remained at a high level of more than 300 yuan/KG for a long time.
Entering 22Q4, the new production capacity of polysilicon is gradually put into operation, which is gradually greater than the back-end demand. The return of polysilicon price is only reasonable.
However, this price cut has become the fault of silicon wafers!
4. The price cut of silicon wafers triggers the price cut of the industrial chain
The reason for the product price reduction is the oversupply, but it can also be subdivided:
1. Insufficient demand
In the past, the photovoltaic industry experienced anti-dumping in Europe and the United States, and the domestic photovoltaic new policy, which led to a cliff-like decline in demand, which brought disaster to the industry.
Is this price cut a disaster? Certainly not.
2. Oversupply
This imbalance between supply and demand is not due to insufficient demand.
Although foreign demand decreased at the end of the year, a large amount of demand from large domestic bases has not yet been released. Not long ago, experts in the power station industry said that a large number of centralized power station projects are waiting to be installed this year. It is expected that the domestic total will reach more than 100GW, and at least 90GW will be no problem. However, the enthusiasm for centralized installation is not high now, and the expectation has dropped to 85GW. Apparently, the installed capacity of 15GW can fully absorb the increase in silicon materials in Q4.
The lack of enthusiasm for domestic power station installation has brought about insufficient demand, which is the reason for the imbalance between supply and demand. The reason why the power station is not installed is that the price of components has remained at 1.95-2.02 yuan/w for a long time, which is too high. Therefore, to solve the contradiction must be a price cut!
3. Reasons for the price reduction of silicon wafers
When the normal demand is insufficient, the order of price reduction should be: components – batteries – silicon wafers – silicon materials.
The lack of demand this time is caused by the high price. Who will start to cut the price? Components are still fulfilling pre-orders, and obviously there will be no price cuts; batteries have limited say, which is meaningless. Silicon is in a high-margin honeypot, and apparently it isn’t. Only silicon.
Silicon wafers are the intermediate links, and have always been used to earn processing fees. The silicon wafer end has a characteristic of high concentration. Central and LONGi are duopoly, with a market share of 50% in normal years and 70% in peak times. Therefore, it is reasonable to cut the price of silicon wafers first.
4. Why Central
At present, Zhonghuan’s production capacity has increased rapidly, reaching 140GW, and it is the only manufacturer that can supply high-quality 210/150 and various N-type wafers in large quantities, and has the pricing power of silicon wafers.
Zhonghuan’s module production capacity is very small, and the maximization of silicon wafer sales is the goal pursued by Zhonghuan, which has the power to promote the increase in terminal demand.
When the terminal demand is insufficient, Zhonghuan’s polysilicon consumption is sufficient to negotiate with polysilicon manufacturers to obtain the desired polysilicon price. Central is a professional silicon wafer factory, so there is no need to worry about the future. The supply of cheap silicon wafers to independent battery module factories can drive down the prices of batteries and modules in turn, thereby achieving the purpose of stimulating end-use demand.
Five, the overall situation of silicon wafer price reduction
Zhonghuan’s price reduction is not just a game of the company, but more of a political need.
1. The needs of 3060
The realization of 3060 has a route plan, and the annual installation of centralized power plants must be completed.
In 2022, the price of silicon materials will rise, which will hinder the installation of centralized power plants. Therefore, Fa Ge has repeatedly interviewed manufacturers in the industrial chain. Tongwei’s high-profile low-price bidding for components last time was an attempt to guide component prices down, but the component factory has no money to make, how to follow up? The price cut in Zhonghuan is also after a large-scale interview. It coincides with the release of new silicon production capacity and the decline in foreign demand, so the price cut is a matter of course.
2. The need to increase demand for photovoltaics
One of the most criticized photovoltaic power generation is the insufficient consumption of the grid. One of the ways to solve grid consumption is to equip with energy storage. However, due to the high price of components, it is almost impossible to equip power stations with energy storage.
At present, the balance point of domestic power stations is about 1.9 yuan/w, and the price of components can drop to 1.8 yuan, which can stimulate the enthusiasm for installation of power stations. The power station is equipped with energy storage at a ratio of 10%, and the approximate conversion cost is 0.2-0.3 yuan/watt. Therefore, when the component price drops to 1.6 yuan, the power station can fully absorb the energy storage cost. At this time, the photovoltaic power station has no worries, which greatly increases the demand for photovoltaic installed capacity.
This may be the reason for the large price reduction in Zhonghuan this time. The target is to reduce the module price to 1.5-1.6 yuan/w!
6. Behind the lies of photovoltaics
When this article was still in writing, LONGi and Zhonghuan successively announced a new round of silicon wafer prices, and invariably quoted the price of 182/150 at 5.4 yuan per piece, and it was the first time that LONGi reported the price of 150. The purpose is obvious. The price of silicon wafers is agreed by the duopoly! The lie of the silicon wafer price war is self-defeating!
This round of price cuts, first of all, is the price cut in Central, and the second-tier factories will follow up. Central’s utilization rate has increased from 60+% to 90%, and LONGi’s utilization rate has increased from 70% to 85%. It can be seen that Zhonghuan and LONGi do not have the problem of destocking. Instead, they increase production and ensure supply, thereby ensuring price cuts to drive the industry Validity of the chain markdown.
Since the price reduction of silicon wafers is a unified action of the duopoly, it is beyond doubt that the price of silicon materials has actually been reduced to a reasonable price. Therefore, the price reduction of silicon wafers this time is the normal price transmission of the reduction in raw material prices!
Why do market tongues create lies? Look at the stock trend and it will be clear: high positions are long, low positions are short!
What is certain is that after the completion of this price reduction, photovoltaic demand will continue to maintain high growth, and photovoltaic chain stocks will continue to maintain high growth.
Note: The current market is an extreme time for capital games. This article cannot be used as a basis for entering the market. Photovoltaic stocks need to wait for a clear bottoming signal.
$TCL Zhonghuan(SZ002129)$ $LONGi Green Energy(SH601012)$ $Tongwei Stock(SH600438)$
There are 135 discussions on this topic in Xueqiu, click to view.
Snowball is an investor social network where smart investors are all here.
Click to download Xueqiu mobile client http://xueqiu.com/xz ]]>
This article is transferred from: http://xueqiu.com/2236698394/238511389
This site is only for collection, and the copyright belongs to the original author.