Market research firm, Bernreuter Research is forecasting PV installations could reach 36GW in 2013, driving renewed polysilicon demand that is expected to push spot prices to around US$25/kg by the end of 2013.
The latest forecast could provide significant relief for the struggling polysilicon sector, after high purity polysilicon spot market prices plummeted 59% in 2011, followed by a 47% decline in 2012, reaching a record low of US$15.35/kg, according to Bernreuter Research.
Major growth markets for installations in 2013 are expected to be China, Japan and the US, which are expected to replace Europe as the key regions for PV installation growth.
Johannes Bernreuter, head of Bernreuter Research and author of the global polysilicon market report, The 2012 Who's Who of Solar Silicon Production, said: “We now expect new PV installations to reach 35 to 37 gigawatts in 2013. China, Japan and the USA will replace Germany and Italy as the PV growth locomotives.”
Polysilicon production overcapacity and an inventory overhang of 25,000 MT of inventory from 2011 dogged the sector throughout 2012. The severe ASP declines forced around 50 polysilicon producers, especially small players particularly in China to halt production. Major producers, which had been in capacity expansion modes also announced cancellations of future plans and lowered production utilisation rates in the third quarter of 2012, according to the market research firm.
Preliminary estimates from Bernreuter Research suggest that the global polysilicon production volumes actually fell to approximately 235,000 MT in 2012, a drop of almost 8% from the output of 255,000 MT in 2011.
“Along with the large inventories and the supply of thin-film modules, those 235,000 MT were nonetheless sufficient for a newly installed PV capacity of 33 to 34 GW worldwide in 2012,” added Johannes Bernreuter.
Increased PV installations in 2013 are therefore expected to result in an increase in polysilicon production this year. Bernreuter expects a production growth of approximately 6.5% in 2013.
According to Bernreuter, rumours have been circulating that China could impose import duties on foreign polysilicon of as much as 50%, after the government started an investigation into claims that polysilicon imported from the US, Europe and Korea was being sold below cost. Such claims have been refuted by major producers such as Hemlock Semiconductor and Wacker. The push for import duties came from China’s struggling polysilicon producers, although Bernreuter believes that an increase in polysilicon demand and possible import duties will do little to help the floundering sector in China.
“The manufacturing costs of most [Chinese] producers are still too high and the quality of their product is too low,” noted Bernreuter. “We assume a lot of foreign polysilicon shipments for Chinese customers will be diverted to wafer manufacturers in Taiwan and then imported as wafers or solar cells to mainland China.”
Ironically, Chinese module producers have already been forced to source solar cells from Taiwan to overcome duties imposed on Chinese solar cells by the US, after claims of dumping.