Polysilicon prices expected to rebound sharply due to China demand – IHS

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
Market research firm IHS said that FiT (feed in tariff) changes mid-year in China is expected to drive polysilicon demand and price increases in April that could top US$19/kg, up from US$12/kg before Chinese New Year in February. Image: PV Crystalox

Market research firm IHS said that FiT (feed in tariff) changes mid-year in China is expected to drive polysilicon demand and price increases in April that could top US$19/kg, up from US$12/kg before Chinese New Year in February. 

The rebound in polysilicon ASP’s is due to US producers locked out of direct access to the China market, due to the trade war that has generated a tight supply of polysilicon as the global PV market demand remains robust. A significant percentage of solar wafers are made in China. 

“Strong demand for polysilicon prices is triggered by the FiT deadline in China,” said Karl Melkonyan, solar supply-chain analyst for IHS Technology. “Buyers cannot wait any longer to buy polysilicon for solar modules, if they want to them produced and installed before the end of June. It is highly unlikely that polysilicon prices will continue increasing in the second half of the year, but a flat pricing outlook is certainly a possibility, if demand remains as high as previously forecast.”

Technically, polysilicon remains in oversupply with major US located suppliers such as Hemlock Semiconductor, REC Silicon and SunEdison unable to secure sales in China as they have been impacted by high import duties since the US imposed anti-dumping duties on Chinese PV manufacturers. 

“Western manufacturers can no longer sell into China, which is leading to inventory over-supply and even causing some factories to close,” said Jessica Jin, solar supply chain analyst for IHS Technology. “Although they are trying to sell polysilicon at bargain prices, there is low demand for purchasing silicon outside of China, because most wafer factories are located in China.”

Major European polysilicon producer Wacker avoided import duties to China on the basis of minimum price deals, while Korean producers such as OCI and Hanwha were given extremely low duty levels to enable Chinese polysilicon consumers to have access to high-quantities of high-purity material, limiting the impact on domestic PV manufacturers. That poly had worked last year but global PV market growth, notably in the US and South East Asia has restricted polysilicon availability in China. 

The tight supply is also caused by limited polysilicon capacity expansions due to the reduction in production from higher cost producers due to falling polysilicon ASP’s. 

Recently, PV Tech highlighted the concerns for a shortage in polysilicon that could potentially impact the industry in the near future.

Read Next

June 15, 2021
Xinte Energy has unveiled plans to sell nearly 180 million shares in the company to raise funds for a new 100,000 ton polysilicon production facility.
PV Tech Premium
June 10, 2021
In the second part of a two-part feature on the solar industry’s response to polysilicon price increases, Carrie Xiao hears from industry leaders about the importance of technology innovation, efforts to reduce waste and the need to avoid cutting prices blindly just to appease customers.
June 9, 2021
In the face of rising materials costs and natural disasters impacting output, solar manufacturers should heighten their focus on insurance placement to protect against large losses, a Chinese insurance broker has told PV Tech.
PV Tech Premium
June 9, 2021
Price increases in polysilicon and other auxiliary solar module materials have exerted much pressure on manufacturers, JA Solar has said, impacting on profitability in the first half of 2021. Xinming Huang, senior vice president at JA Solar, tells PV Tech how the company is responding.
PV Tech Premium
June 7, 2021
Soaring polysilicon costs have tipped the solar manufacturing industry to the brink of crisis and while only expected to be in the short-term, the ramifications in 2021 could be significant. On the sidelines of SNEC 2021, Carrie Xiao speaks to experts from across the value chain to determine how solar PV can tackle supply chain constraints.
Live
June 3, 2021
PV Tech reports live from the show floor at SNEC PV Power Expo 2021, bringing you exclusive video interviews, insight, analysis and product reviews. Today's videos include Sungrow FPV, Seraphim, Growatt and more.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
July 6, 2021
Solar Media Events
August 24, 2021
Solar Media Events, Upcoming Webinars
October 6, 2021