The hottest SNEC2023 Shanghai photovoltaic exhibition in history has just ended, and the gunfire of photovoltaic "price war" seems to have begun.

On May 29, photovoltaic giant LONGi Green Energy announced a reduction in the price of monocrystalline silicon wafers. Among them: 166mm silicon wafer: from 5.44 yuan / piece to 3.81 yuan / piece, a decrease of 30%; 182mm silicon wafer: from 6.3 yuan/piece to 4.36 yuan/piece, a decrease of 30.8%.

Price war signals

Such a large price reduction is rare in the price adjustment of silicon wafers over the years. The direct reason for the sharp price reduction of silicon wafers is the sharp decline in polysilicon prices.

On May 24, the polysilicon price released by the Silicon Industry Branch of the China Nonferrous Metals Industry Association showed that the domestic N-type material price range was 135,000 yuan / ton - 140,000 yuan / ton that week, and the average transaction price was 135,400 yuan / ton; The price range of monocrystalline dense material is 125,000 yuan / ton to 130,000 yuan / ton, and the average transaction price is 128,000 yuan / ton.

Previously, the silicon industry branch announced on April 26 that the quotation of polysilicon dense material was 180,000 yuan / ton, compared with the latest quotation fell sharply by more than 50,000 yuan / ton. Correspondingly, the cost of 182mm silicon wafers has dropped by about 0.95 yuan / piece.

However, according to industry insiders, the actual transaction price of polysilicon has fallen to about 100,000 yuan / ton, and may even soon fall into the price range of 7-80,000 yuan / ton in the near future.

The sharp reduction in the price of LONGi silicon wafers may have released an industrial signal, and the deep-seated industrial logic of this price adjustment is actually that the photovoltaic industry has entered the era of overcapacity.

During SNEC, Li Zhenguo, founder of LONGi Green Energy, publicly said that in the past two years, the production capacity of the photovoltaic industry has expanded sharply, and overcapacity and potential price wars have become issues of concern in the industry.

According to his prediction, just like the reshuffle of the photovoltaic industry in 2012-2014, more than half of the companies in the industry will be eliminated in the next 2-3 years.

Some insiders even said that in the past 18 years, domestic enterprises have built about 380GW of full-industry chain projects, and in the past 18 months, the industry has built more than 380GW of full-industry chain projects.

In the previous two years, due to the soaring price of polysilicon, the excess profit comparable to Middle Eastern crude oil attracted more and more capital to the upstream sector. As the new polysilicon production capacity continues to increase, the polysilicon surplus is bound to increase rapidly.

According to the statistics of "Zhihui Photovoltaic", as of the end of May this year, it is expected that the polysilicon inventory of the whole industry will exceed 100,000 tons (equivalent to 38GW of silicon wafers); In May, the monthly production has exceeded 110,000 tons, plus imports of more than 120,000 tons (equivalent to 48GW of silicon wafers).

In the second half of this year, the total domestic production and overseas imports of the polysilicon market will quickly climb to more than 130,000 tons. This will lead to a further decline in prices, which are expected to fall to polysilicon cost prices by the end of the year.

As wafer prices fall sharply, downstream module prices will also fall accordingly.