(Bloomberg) --
Tongwei Solar, a unit of Tongwei Co., raised multicrystalline solar cell prices by 11% to 0.6 yuan per watt, according to an Aug. 10 notice on its website.
The company, the world's leading cell producer, also increased prices for three types of monocrystalline cells by 0.08 yuan per watt each, about a 9% increase. The hike is the second in less than three weeks after it increased prices on July 24.
Manufacturers all along the solar supply chain have boosted prices in the past month after a July 19 explosion forced the shutdown of a major polysilicon factory in Xinjiang, China. Other manufacturers in the process are required to take safety measures that could reduce utilization, according to Dennis Ip, an analyst with Daiwa Capital Securities.
“The extreme tight supply is likely to continue and support the rise in polysilicon prices in the third quarter,” Ip said in an Aug. 6 note.
Prices for the conductive material that's key to making solar panels have risen nearly 50% since July 15 to about $10 a kilogram, according to data compiled by BloombergNEF. That's the highest level since October 2018.
More expensive polysilicon has forced manufacturers further downstream to follow suit. LONGi Green Energy Technology Co., the world's biggest solar wafer maker, boosted its prices twice in July after the explosion.
Cell and wafer increases, though, have been relatively smaller than polysilicon, leading to potential margin erosion for the companies, Ip said.
©2020 Bloomberg L.P.
With assistance from Bloomberg
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