Price judgment comes from the relationship between supply and demand. Next year, the market will have more consistent expectations on the demand side, but there will be certain differences on the supply side. The main reason is that the core competitiveness of silicon material companies comes from cost control. Each cost curve is different, resulting in different prices and production capacity. There are differences in operating rates, so this article will start with the source of cost differences among silicon material companies, calculate the silicon material price center next year, and conduct price sensitivity analysis.
Cost is the core competitiveness of silicon companies
Silicon materials are homogenized products, and the competition among enterprises is cost control. The cost of silicon materials constitutes 33%, 32% and 17% of the electricity price, silicon powder and depreciation respectively. In terms of unit price, at the current time, silicon material companies have basically completed their deployment in low-power-price areas, and there is little difference in power purchase prices; all silicon powders are purchased out, and the purchase price is not much different. The actual cause of the different costs of various companies is the difference in production efficiency, which is mainly reflected in the power consumption per ton, whether it can be over-production diluted and depreciated. From the perspective of manufacturing principles, the silicon material preparation technology has matured. Most companies adopt the improved Siemens method for production. The manufacturing methods are basically the same. We believe that the fundamental reason affecting production efficiency is the control of the process flow.
Where is the silicon price center next year?
The price of silicon material depends on the supply and demand pattern and the industry cost curve. We predict that there will be a demand for 450,000 tons of monocrystalline materials in 21 years. From the perspective of supply, we estimate that the global monocrystalline production capacity in 21 years is about 477.6 million. The effective production capacity is oversupply, and the price of silicon materials has a ceiling. However, due to the differences in production costs among various companies, high-cost production capacity will not be opened. We rank the company costs from low to high. The production capacity corresponding to the demand for 450,000 tons of monocrystalline materials falls near the capacity of Wacker in Germany, and the production cost of WACKER is 7.5 About 10,000 yuan/ton, considering the value-added tax, it is believed that the price center in 21 years will be 80-85 yuan/ton (tax included).
Sensitivity Analysis
Silicon materials have certain cyclical properties, and price fluctuations have a greater impact on profitability. Therefore, we have measured the profitability of silicon materials companies at different prices. Take Tongwei as an example, assuming that next year's silicon material sales volume is 95,000 tons, if the silicon material price stabilizes at 85,000/ton, the corresponding annualized profit of the silicon material business is 2.53 billion yuan. If the price rises to 100,000/ton, part of the annualized profit of the corresponding silicon material business is 3.609 billion yuan. At the same time, we estimate that the price of silicon materials will rise to 85,000 yuan/ton, and the gross profit margin of downstream integrated manufacturers is about 19%, which is still within an acceptable range. We believe that the lowest gross profit margin accepted by downstream integrated manufacturers is 15%, and the tax-included price of silicon materials is calculated to be 111,000 yuan/ton.
Source: Chemical Network
