Daquan Energy announced on November 7 that it had recently signed a silicon material contract of about 41.511 billion yuan (including tax). Daquan Energy, the leading silicon material company with a market value of 100 billion, has frequently won large orders. According to incomplete statistics, Daquan Energy has announced six major contracts this year, with a total procurement amount of 255.418 billion yuan. In fact, this is only the epitome of the current “four leading silicon materials” in sufficient orders. Tongwei Shares, GCL Group, Xinte Energy, Dongfang Hope and other companies signed many long orders for polysilicon supply in the year, and the preliminary estimated agreement amount has reached 819.88 billion yuan!
New material information NMT | silicon material price finding inflection point
The intensification of the upstream game has led to the “lock up” has become the normal state of the current industry. However, under the expectation that the output supply will increase substantially in the next few years, the bargaining power of silicon material enterprises for the price of polysilicon may enter the inflection point with the increase of supply. Given the high price of domestic silicon materials, if silicon chip enterprises follow the trend of market price increase, most people may not accept it, but at least they can understand it. However, TCL Central did the opposite, reducing the price of mainstream silicon chips by 3 to 4% from November 1, marking the first shot of price reduction for silicon chip enterprises in the year. In the face of this “belated” price reduction, some people can’t help asking: Can this price reduction drive the price of upstream silicon materials down?
For vertically integrated enterprises, “locking” the future large-scale silicon material supply is also related to the further expansion of their own capacity.
In fact, the reason why TCL Central reduced the price this time is largely due to the long order, because the company signed a long order for the purchase and sale of silicon materials with GCL Technology as early as last year, agreeing to purchase a total of 350000 tons of polysilicon materials including granular silicon from GCL Technology from January 2022 to December 2026. There are a lot of raw materials in hand that have the confidence to reduce the price. Even people in TCL Central said in an interview with Cailian News Agency that the main reason for the price reduction is that the supply of upstream silicon materials is more sufficient than in the third quarter, and the company’s processing rate is improved.
Since this year, long polysilicon orders of more than 200000 tons are not uncommon. Longji Green Energy, Qinghai Gaojing, Meike Silicon Energy, Shuangliang Silicon Materials (a subsidiary of Shuangliang Energy Saving), Jingke Energy, and TCL Central have all put out long orders for silicon materials of large scale. It is worth mentioning that, from the current public information, Shuangliang Silicon Materials, Jingke Energy and TCL Central have “locked” a lot of silicon materials among the downstream enterprises that have signed long orders with silicon manufacturers this year.
New material information NMT | silicon material price finding inflection point
It should be noted that the relevant business departments and bureaus of the Ministry of Industry and Information Technology, the State Administration of Market Regulation and the National Energy Administration collectively interviewed some polysilicon backbone enterprises and industry institutions in early October to guide the relevant units to strengthen self-discipline, self-inspection and standardized management, and not engage in hoarding, speculation and other price-raising activities. At that time, there was a market point of view that if the price increase of polysilicon included the factor of raising the price, it would not be so simple.
In short, the turning point of silicon energy Buddha is still the relationship between supply and demand. Although based on the industry characteristics, price locking has become the industry norm, with less than 10% of the output circulating in the market, the final price change, on the one hand, is determined by market sentiment, but more depends on the supply and demand relationship between upstream and downstream. If the downstream enterprises “have rice in the pot” and are sufficient, the price of upstream raw materials is bound to decline, which is just around the corner.
Reference source:
1. Long order of trillions of silicon materials! How hot is silicon material?
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3. When will the price of silicon material in TCL Central “the language is refusing, but the body is honest” reach a turning point?
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