According to EnergyTrend, the intensive pricing competition in the photovoltaic (PV) market has gradually come to an end. Due to the increased demand in emerging markets, solar system demand in 2014 is likely to rise substantially. The total amount of grid-connected installations is likely to reach 28.6GW in 2013, and total shipments in 2013 will be around 33.3GW, which shows that overall supply in the PV market can be somewhat sufficient. Although total module shipments may be about 40GW in 2014, the actual amount of grid-connected installations will only be around 39.5GW. Module supplies, therefore, may be somewhat restricted.
The oversupply situation in the global PV industry in the past few years has led to decreased polysilicon pricing. Since most new makers continue to suffer from losses, they have suspended production successively since the second half of 2012, which has caused global polysilicon capacity to continue to decline. However, market demand may increase in 2014, but as it may take about a quarter to get polysilicon production lines restarted, EnergyTrend believes that polysilicon supply may be restrained or even become insufficient in the first quarter of 2014.
Global polysilicon output is forecast at around 0.17 million tons in 2013, which represents 31GW of supply. The average quarterly supply is between 7-8GW. Looking into the first quarter of 2014, EnergyTrend estimates that demand for silicon wafers will be around 8GW. But based on current output, polysilicon supply is around 0.04 million tons, which is 7.2GW of supply. On the other hand, makers are still optimistic about demand in fourth-quarter 2013 with current shipment conditions remaining normal. In addition, it is projected that inventory levels will remain the same. According to the current conditions, EnergyTrend believes that polysilicon supply may become more restricted in first-quarter 2014.
EnergyTrend indicated that whether the supply shortage can be solved or not will depend on the following variables: how fast China's polysilicon makers can restart production, the status of new production capacity (e.g. Hanwha, Tokuyama, OCI, etc), and the ratio of new capacity in semiconductor grade and solar-grade products. If the progress of the above variables can meet or even surpass expectations, polysilicon supply and demand may be improved from the end of the first quarter to the beginning of second-quarter 2014.
