Polysilicon supply chain issues emerging as spot prices rise, says Barclays Capital

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

Just when it was safe to say that the severe polysilicon shortages from a few years ago were long-gone and that a era of oversupply boded well for users in the solar industry, issues have emerged within the supply chain that are forcing spot prices higher once again. According to a report from Barclays Capital financial analyst, Visal Shah, checks have shown that spot prices have risen to as high as US$70-80/kg, yet spot prices were at US$55-60/kg range, only a few weeks ago. Bottlenecks were said to have appeared from polysilicon through to wafering, according to the analyst.

Shah noted in his investor note that there were several issues most likely affecting spot prices at the moment. There have been polysilicon supply issues due to production halts due to technical problems such as fires at LDK’s polysilicon plant, which Shah said had meant the plant needed to be shutdown recently.

This had led to LDK attempting to secure as much polysilicon for its wafer production operations due to strong demand for wafers.

Another producer in China, Xinguang had shut operations completely, while it worked to replace old production equipment and systems originally supplied from Russia to modern technology that would enable the company to compete better in the future. Barclays Capital said Xinguang’s capacity before the shutdown had been 1,200MT/yr.

The well documented recent power outage at an REC run plant was also cited as a catalyst behind polysilicon shortfalls and higher demand for spot polysilicon.

However, the report also links capacity mismatch issues at the wafer and cell segment of the supply chain notably that checks has shown that ingot capacity currently exceeded wire saw capacity, which remained ‘tight.’

In periods of high-demand for wire saw systems, lead times can extend considerably due to the complexity of the machines and set-up times before entering production. Although key equipment suppliers such as Meyer Burger and Applied Materials HCT arm have added capacity over the last few years to meet the last major wave of orders, the current wafer capacity additions are on a completely different scale than those seen in 2007 and 2008.

Barclays Capital noted that one customer of Applied Materials HCT arm had equipment scheduled originally for delivery in February, 2010 but received the order five months later.   

Although common practice to multiple-source wafering equipment, demand for equipment is high and difficult to find suppliers without supply constraints as all equipment is usually made to order.

Shah also noted that there had been an overall higher than anticipated wafer and cell capacity additions in July to August timeframe yet manufacturers were unable to obtain polysilicon, especially on the spot market.

Shah believes that most polysilicon suppliers have contracted nearly 100% of the volumes to long term contracts in order to avoid the sharp swings in spot market, leaving suppliers unable to fulfil increased demand from the spot market, despite attractive prices.

10 November 2021
The solar tracker market continues to mature at breakneck speed, with designs and component selections becoming ever-more complex in the pursuit of better project economics. But a more simplistic design could deliver a triple benefit of lower Capex, EPC and Opex costs. This webinar will set out the ideal single axis tracker design for utility-scale solar farms. The design leapfrogs from decades of experience, with a comprehensive understanding and attention to the three cost structures of Capex, EPC and Opx. Sun and Steel Solar has prototyped a single axis tracker designed to deliver up to US$0.03/W in real savings compared to existing single axis trackers on the market. That’s US$30 million for every gigawatt deployed.
15 November 2021
The 10th edition of the famous Metallization and Interconnection Workshop, MIW2021, will take place in the Thor Central venue in Genk, Belgium, on Monday, November 15, and Tuesday, November 16, 2021 as a face-to-face meeting. We are longing for direct exchange of knowledge and ideas after a long time. Hopefully you can be part of it! But of course, the organizors will keep an eye on the evolution of the Covid pandemic. It will be assess carefully, whether the workshop can be held without major risks or excessive restrictions. We are looking forward to exciting talks, discussions and meetings and to welcoming you in Genk!
23 November 2021
The solar, storage and EV industries in the UK are going from strength to strength. There is no better place for the community to meet, share ideas and do business than Solar & Storage Live from 23-25 November at the NEC.There’s something for everyone; more than 150 exhibitors, a high-level conference, a start up and innovation zone, a poster zone, strategic partners to network with and much more. 
24 November 2021
In this webinar we will assess how these technical parameters and land characteristics can make a difference, in order to correctly make the choice between 1P or 2P trackers. There will be a comparison of the behaviour of Soltec’s 1P tracker, SFOne, and its 2P tracker, the SF7.
1 December 2021
Understand fully the technical and logistical supply chains that determine the production and performance of solar modules, including all related factors impacting quality, reliability & bankability. This event will be run online with streamed content, access to session recordings and chat/messaging tools for delegates to connect.
2 December 2021
Intersolar is the world’s leading exhibition & conference series for the solar industry. As part of this event series, Intersolar India in Mumbai is India’s most pioneering exhibition and conference for India’s solar industry. It takes place annually and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. Since 2019, Intersolar India is held under the umbrella of The smarter E India – India’s innovation hub for the new energy world.

Read Next

October 28, 2021
The US International Trade Commission (ITC) has ruled in favour of US solar manufacturer Solaria in an initial ruling related to alleged patent infringement by Canadian Solar.
October 28, 2021
A round-up of the latest news from the US solar market, including a new Lightsource bp project in Colorado, CenterPoint’s PV expansion in Indiana and another solar power purchase agreement (PPA) from Facebook.
October 28, 2021
Off-grid, pay-as-you go solar company BBOXX has expanded into Nigeria, the company’s largest market to date, with the aim of providing clean energy access to 20 million people over the next decade
October 28, 2021
US residential solar installer Sunnova is broadening its service offering in areas such as battery storage and electric vehicle charging as it bids to double its customer count over the next two years.
PV Tech Premium
October 28, 2021
With the crucial COP26 summit just days away, PV Tech Premium breaks down the key players and countries for solar to watch at the event
October 27, 2021
More than half of utility-scale solar projects planned for next year could be at risk of delay or cancellation as a result of surging materials and logistics cost, new analysis has claimed.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
November 10, 2021
8am (PST) | 5pm (CET)
Solar Media Events
December 1, 2021