LONGi ensuring price stability for customers amid volatile silicon pricing situation
Supply of silicon materials has become volatile as a direct result of challenging conditions in the upstream segment of the photovoltaic industry. Rising prices are likley to impact installations in the second half of the year and into 2021.
Three major polysilicon makers; Daqo New Energy, GCL-Poly and most recently Tongwei have been affected by accidents, flooding and maintenance issues resulting in shortage of supply and increased prices. As a result, prices along the PV silicon value chain have begun to climb, signalling higher project costs going into 2021. Data and research firm, Trend Force, < https://www.energytrend.com/research/20200813-19215.html> has seen an increase in average wafer costs of 10%.
LONGI Solar recently raised prices on their Mono wafers by 7% to account for higher input costs. “The price of LONGi silicon wafers fell sharply in the past year up to May 2020.” Said Dennis She, Senior Vice President, LONGi Solar, “ The recent price adjustments of silicon wafers are based solely on the principle of digesting the increase in raw silicon material costs. LONGi has not increased prices due to forces of demand and supply.”
Most large scale PV projects will order modules six months before delivery and so current price increases will not affect projects on site for some time. However, developers around the world looking to secure supply for onsite installations at the end of 2020 and early 2021 are being forced to reassess their project economics to account for these current rises. A lack of pricing certainty is forcing some projects to be suspended.
In Australia, where the large scale segment of the market is dealing with financing, curtailment and logistical headwinds this news couldn’t come at a worse time. LONGi, as one of the top 5 modules suppliers to current large scale projects in Australia, is determined to support key customers.
Stephan Zhang, Managing Director, LONGi Australia, “In terms of price control, LONGi will moderately adjust prices within a range that is acceptable to our customers. LONGi hopes to maintain a stable market and a smooth transition when the market fluctuates sharply due to short-term changes in demand and supply.”
Module supply constraints and short term price volatility may plague developers in Australia over the coming quarter. LONGi Solar Australia, as an integrated manufacturer of modules, is able to help cushion price shocks along the supply chain and remains committed to long term manufacturing expansions to achieve optimal LCOE for solar installations.
“It is estimated that by the end of 2020, our capacity for monocrystalline modules will reach 25GW or beyond.” continues Stephen Zhang, “In addition, we produce silicon wafers in-house, and cell manufacturers are our strategic partners, so our timeliness of supply and price advantages will be stronger.”
Instead of seeking quick profits through short term price volatility, LONGi will give priority to strategic customers when and if supply is tight. It is actively working with key partners to agree price adjustment mechanisms to reassure customers.
“LONGi is in the Australian market for the long term. We are not focussed on making quick money in the spot market. Instead LONGi always prioritises supply to strategic customers when resources are tight. We hope to give over customers security. Steadiness and reliability are core values of the LONGi brand.” Said Stephan Zhang, “LONGi does not want to see a sharp rise or fall in module prices, as neither is a positive for the industry long term.”