The operating rate is a leading indicator to grasp the comprehensive performance of supply and demand in this link. Through the operating rate, we can assist in judging the supply and demand performance of an enterprise in the market, and the overall operating level and trend can understand the health of the industry development.
With the evolution of the situation in the photovoltaic industry in recent years , the high profits in the upstream have attracted manufacturers to compete for the layout. The production capacity of silicon materials and wafers has increased significantly this year, and the huge production capacity has gradually formed the accumulation of inventory, which has led to the decline of the upstream price.
Source: InfoLink Consulting PV Supply Chain Operating Rate Report
The following is an analysis of the current operating rate of each link:
Silicon materials
In July, the production capacity of silicon materials continued to maintain positive growth. It is estimated that the monthly output of silicon materials will reach 122-128000 tons, and the operating rate will be maintained at about 90%. At present, silicon material enterprises maintain a relatively stable operating level, and after the price overfalls, the inventory level has been effectively reduced. Looking closely, the output was only slightly flat compared with the previous month, mainly because although the new production capacity continued to be put into operation, the progress of each production was different, and the actual output was affected by the shutdown and power rationing in individual production areas. With the current demand for N-type products, manufacturers increase the proportion of high-quality silicon material output, because the proportion of unit output in the same time is lower than that of P-type, it also affects the actual output scale. It is expected that in recent years, the two directions of output optimization and quality improvement will be the focus of the development of silicon material enterprises. The total output of
silicon wafers
in July is expected to reach 52-53 GW, up 11% -13% from June. However, due to the simultaneous increase in production capacity, the operating rate remained around 83% compared with last month. Observing the silicon wafer sector, in addition to the continuous release of integrated manufacturers for self-use, professional silicon wafer manufacturers have also released new production capacity, and the market circulation supply increased in July. In terms
of N-type silicon wafers, they are still relatively customized products, mainly for the demand orders of first-line component factories, and it is expected that there will be no excess and abnormal inventory levels in short-term production. The actual production and shortage of subsequent N-type silicon wafers will still depend on the actual output of N-type downstream products, batteries and modules.
In recent months, domestic PERC battery manufacturers have maintained a nearly full-load production level, while the new production capacity is mainly N-type TOPCon. However, due to the slow climbing process of production expansion, the overall operating rate of domestic batteries has been converted to about 70% this month, and the output has maintained a small growth to 48 GW. The monthly N-type output is between 10-12 GW. In
the overseas part, the battery production capacity in Southeast Asia is the largest. Previously, the problem of power supply in Vietnam led to a sharp decline in the operating rate of local manufacturers. The operating rate of the affected manufacturers was reduced by 5-15%. It is expected that the power supply will recover slowly from this month, and the overall operating level in Southeast Asia will rise slightly to about 70%.
Compared with last month, component manufacturers hesitated to plan production in the face of price losses caused by supply chain loosening and sharp price decline, and there was a wait-and-see atmosphere at home and abroad. In July, with the successive signing of new orders, manufacturers had a trend of upward revision of production scheduling forecasts. The component start-up performance of first-line manufacturers rose to about 82%, while that of second-line and overseas manufacturers also reached 65%. The overall output was also released to 46 GW by first-line manufacturers, an increase of 15% over the same period last year.
In the inventory part, although the inventory of components has gradually stabilized due to the sale of inventory at a low price in the early stage, the inventory level of some manufacturers is still high, and the overall inventory falls around 1.5-2 months.
To sum up, in the first half of the year, under the release of new production capacity, the monthly output of silicon materials and wafers continued to enlarge, and the accumulated inventory also led to the rapid collapse of prices. At the cell end, most PERC cells maintained full production, and the monthly output grew steadily under the operation of TOPCon project; The new production capacity of components is huge, but manufacturers continue to be affected by the performance of terminal demand at home and abroad, resulting in continuous revision of planning and production scheduling.
Looking forward to the second half of the year, it is expected that after the upstream price gradually falls to the cost level of manufacturers, the space for price decline will be significantly narrowed. However, manufacturers have a huge plan for new production capacity, and the market will continue to face the excess supply of upstream and the rise of inventory level. In order to achieve the balance point between inventory level and profit price.
At the downstream battery end, with the iteration of technology, the nominal capacity of TOPCon is expected to exceed 600 GW by the end of this year, adding to the existing 500 GW PERC cell capacity, the huge and excess capacity will intensify the competition pattern of the battery sector itself. If the climbing process of TOPCon cells is smooth and the output growth exceeds expectations, in addition to the shortage of supply organic rate of N-type silicon wafers, the cells will passively deploy their own production level to slow down the price decline due to oversupply at the end of the year. As for components, as new players and upstream manufacturers continue to invest in the layout of the component business, they are also facing excess supply. At present, there is serious price competition in the component sector and the accumulation of inventory at home and abroad. It is expected that in the second half of the year, the first-tier component manufacturers will be differentiated from the second-tier and third-tier manufacturers in terms of operating rate due to their brand and integration advantages.
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