The business community’s nightmare of the polysilicon industry continued on October 12th, sparked by double surges in production capacity and falling demand. The price of polysilicon fell from US$110/kg at the beginning of the year to US$40-50/kg, and is likely to fall to US$35/kg.
Analysts pointed out that once polysilicon falls to 35 U.S. dollars per kilogram, as many as 90% of polysilicon SMEs will close down, and there will be only 5-6 suppliers who are lucky enough to survive. This statement is not sensational. Even solar giants such as Suntech, JA Solar, Zhongdian Photovoltaic, and LDK Solar, which are listed in the United States, have suffered losses in the second quarter of this year. The situation in the third quarter will be even worse.
Polysilicon Prices Will Set a New Low in 2012 Although the contract price of polysilicon in the international market in the third quarter of this year was still firm at around US$50/kg, there was already a transaction price of US$45/kg in the spot market. However, even if the 45 US dollars / kg transaction price, it may fall after a few months. During the National Day Gold (1666.10, 5.10, 0.31%) week, the international market reported that due to the production of a number of new production lines, international polysilicon manufacturers have started to launch new polysilicon contracts in 2012 for new production capacity. Some new contract prices are Kilograms will be less than 40 US dollars, do not rule out the price will drop to 35 US dollars. This price level is even lower than the freezing point price of polysilicon 40 US dollars/kilogram during the worst period of the financial crisis in 2009.
The downturn in demand in the downstream market is the chief culprit in the decline of polysilicon prices.
According to statistics, in 2010, the global installed capacity of new photovoltaics was 15.8GW, of which the EU newly installed 12.3GW. Germany installed 6.7 GW in 2010, accounting for 42.5% of the global market share. It is the strong demand of the European market in 2010 that promoted the recovery of the photovoltaic industry in 2010 and attracted a large amount of funds to enter the production of polysilicon. However, since 2011, due to the intensification of the sovereign debt crisis in Europe, coupled with Germany, Italy, Spain have cut subsidies for solar energy, making Europe's photovoltaic demand shrink.
Market research institute Isuppli had predicted that the installed capacity of the German PV market in 2011 will reach 7G W, but the agency has now reduced the installed capacity of Germany in 2011 to 5.9GW. However, even with an installed capacity of 5.9 GW, there are still authoritative analysts saying that this figure is high. On the one hand, because of the tighter lending by German banks, project developers must invest all their money on their own. On the other hand, with the pre-installation, roofs and floors suitable for installing solar energy in Germany are increasingly difficult to find. Another solar energy-requiring country, Italy, is also currently suffering from a combination of a debt crisis and weak economic growth (the Italian government recently reduced its 2011 economic growth forecast from 1.1% to 0.7%), and solar energy demand has slowed down significantly. Although the photovoltaic market in China and the United States has a certain growth rate driven by policies, it is difficult to fill the gap left by the declining demand in Germany and Italy.
While the demand is dropping, the production capacity of polysilicon is continuously being released. It is reported that in 2010 the global production capacity of the top ten polysilicon manufacturers was close to 180,000 tons, while in 2010 the global polysilicon production was only 160,000 tons. It is estimated that the global polysilicon production capacity will reach over 320,000 tons in 2011, while the market demand is less than 200,000 tons. The large excess production capacity restricts the price of polysilicon.
The declining demand for surviving companies or only the remaining five or six companies has led to a significant increase in corporate inventories. According to the China Non-ferrous Metals Association Silicon Industry Branch, China's current solar cell inventory will be at least 10G W or more. The latest statistics from the authority's solarbuzz show that the demand in the European market this year has decreased by 20% compared with the same period of last year. If domestic manufacturers are shipped according to the indicators at the beginning of the year, they are expected to exceed the end market demand of 4.4 GW. The agency expects that if the production cannot be effectively controlled, the inventory of components may soar to 22 G W by the end of next year. The soaring of stocks has caused the capital chain of many SMEs to be in a tight state. To ease the shortage of liquidity, many companies have had to lose money.
Judging from the current production cost of polysilicon, the cost of international first-line companies has already fallen below US$25/kg, the production costs of domestic large-scale enterprises are mostly between US$30-40/kg, and the costs for SMEs are above US$45/ kg. This means that even if the price of polysilicon drops to 35 U.S. dollars per kilogram, the first-line companies will still be profitable, and SMEs will certainly be eliminated.
The sharp decline in prices of polysilicon and photovoltaic modules has already brought a greater impact on China's photovoltaic industry. In the past few months, more than 50 solar energy companies have fallen in the country, and one third of the companies are in semi-discontinued state. A related person in charge of Yingli New Energy also said in an interview with this reporter that many small and medium-sized photovoltaic companies are currently living in a worrisome state. "The order price is too low to meet, and the capital chain is very tight. Many companies may close at the end of the year."
Solarzoom photovoltaic solar energy network analyst, the country's largest solar industry community and portal site, pointed out that polysilicon is brewing a knockout match. Once it hits the $35 mark, the elimination rate of SMEs will be as high as 90%. Suppliers who are fortunate enough to survive will Only 5-6 homes are left. Li Shengmao, a senior research fellow in the new energy industry at China Investment Advisors, also stated that the possibility of PV SMEs being merged or closed next year is greatly increased.
Analysts pointed out that once polysilicon falls to 35 U.S. dollars per kilogram, as many as 90% of polysilicon SMEs will close down, and there will be only 5-6 suppliers who are lucky enough to survive. This statement is not sensational. Even solar giants such as Suntech, JA Solar, Zhongdian Photovoltaic, and LDK Solar, which are listed in the United States, have suffered losses in the second quarter of this year. The situation in the third quarter will be even worse.
Polysilicon Prices Will Set a New Low in 2012 Although the contract price of polysilicon in the international market in the third quarter of this year was still firm at around US$50/kg, there was already a transaction price of US$45/kg in the spot market. However, even if the 45 US dollars / kg transaction price, it may fall after a few months. During the National Day Gold (1666.10, 5.10, 0.31%) week, the international market reported that due to the production of a number of new production lines, international polysilicon manufacturers have started to launch new polysilicon contracts in 2012 for new production capacity. Some new contract prices are Kilograms will be less than 40 US dollars, do not rule out the price will drop to 35 US dollars. This price level is even lower than the freezing point price of polysilicon 40 US dollars/kilogram during the worst period of the financial crisis in 2009.
The downturn in demand in the downstream market is the chief culprit in the decline of polysilicon prices.
According to statistics, in 2010, the global installed capacity of new photovoltaics was 15.8GW, of which the EU newly installed 12.3GW. Germany installed 6.7 GW in 2010, accounting for 42.5% of the global market share. It is the strong demand of the European market in 2010 that promoted the recovery of the photovoltaic industry in 2010 and attracted a large amount of funds to enter the production of polysilicon. However, since 2011, due to the intensification of the sovereign debt crisis in Europe, coupled with Germany, Italy, Spain have cut subsidies for solar energy, making Europe's photovoltaic demand shrink.
Market research institute Isuppli had predicted that the installed capacity of the German PV market in 2011 will reach 7G W, but the agency has now reduced the installed capacity of Germany in 2011 to 5.9GW. However, even with an installed capacity of 5.9 GW, there are still authoritative analysts saying that this figure is high. On the one hand, because of the tighter lending by German banks, project developers must invest all their money on their own. On the other hand, with the pre-installation, roofs and floors suitable for installing solar energy in Germany are increasingly difficult to find. Another solar energy-requiring country, Italy, is also currently suffering from a combination of a debt crisis and weak economic growth (the Italian government recently reduced its 2011 economic growth forecast from 1.1% to 0.7%), and solar energy demand has slowed down significantly. Although the photovoltaic market in China and the United States has a certain growth rate driven by policies, it is difficult to fill the gap left by the declining demand in Germany and Italy.
While the demand is dropping, the production capacity of polysilicon is continuously being released. It is reported that in 2010 the global production capacity of the top ten polysilicon manufacturers was close to 180,000 tons, while in 2010 the global polysilicon production was only 160,000 tons. It is estimated that the global polysilicon production capacity will reach over 320,000 tons in 2011, while the market demand is less than 200,000 tons. The large excess production capacity restricts the price of polysilicon.
The declining demand for surviving companies or only the remaining five or six companies has led to a significant increase in corporate inventories. According to the China Non-ferrous Metals Association Silicon Industry Branch, China's current solar cell inventory will be at least 10G W or more. The latest statistics from the authority's solarbuzz show that the demand in the European market this year has decreased by 20% compared with the same period of last year. If domestic manufacturers are shipped according to the indicators at the beginning of the year, they are expected to exceed the end market demand of 4.4 GW. The agency expects that if the production cannot be effectively controlled, the inventory of components may soar to 22 G W by the end of next year. The soaring of stocks has caused the capital chain of many SMEs to be in a tight state. To ease the shortage of liquidity, many companies have had to lose money.
Judging from the current production cost of polysilicon, the cost of international first-line companies has already fallen below US$25/kg, the production costs of domestic large-scale enterprises are mostly between US$30-40/kg, and the costs for SMEs are above US$45/ kg. This means that even if the price of polysilicon drops to 35 U.S. dollars per kilogram, the first-line companies will still be profitable, and SMEs will certainly be eliminated.
The sharp decline in prices of polysilicon and photovoltaic modules has already brought a greater impact on China's photovoltaic industry. In the past few months, more than 50 solar energy companies have fallen in the country, and one third of the companies are in semi-discontinued state. A related person in charge of Yingli New Energy also said in an interview with this reporter that many small and medium-sized photovoltaic companies are currently living in a worrisome state. "The order price is too low to meet, and the capital chain is very tight. Many companies may close at the end of the year."
Solarzoom photovoltaic solar energy network analyst, the country's largest solar industry community and portal site, pointed out that polysilicon is brewing a knockout match. Once it hits the $35 mark, the elimination rate of SMEs will be as high as 90%. Suppliers who are fortunate enough to survive will Only 5-6 homes are left. Li Shengmao, a senior research fellow in the new energy industry at China Investment Advisors, also stated that the possibility of PV SMEs being merged or closed next year is greatly increased.
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