No end in sight for polysilicon oversupply,says Solarbuzz Press release;Jackie Chang,DIGITIMES[Tuesday 2 October 2012]Despite the fact that most leading polysilicon producers have been operating at a loss,polysilicon capacity is expected to grow 22%in 2012 and a further 18%in 2013,according to the NPD Solarbuzz.Average industry-wide polysilicon prices for solar applications are forecast to drop 52%in 2012,while plant utilization is expected to decline from 77%in 2011 to 63%.
"The last thing the polysilicon industry needs right now is more capacity.But some of the new plants that were started two to three years ago are proving hard to abandon,"stated Charles Annis,vice president at NPD Solarbuzz."In addition,some producers are adding capacity in an attempt to lower their costs through economies of scale.Some are improving capacity productivity,while others are upgrading manufacturing technology,such as adopting hydrochlorination,to reduce power consumption and increase scale."
Total polysilicon capacity will exceed 385,000 tons in 2012,of which 70%is held by a small number of tier-one producers.In fact,these tier-one providers alone are forecast to satisfy all polysilicon demand under the NPD Solarbuzz most-likely end-market scenario for the next few years.
Unless end-market demand provides a strong upside surprise to expected polysilicon requirements,many of the 57 tier-two and three producers are likely to exit the industry within the next 18 months.Indeed,even a few of the less-experienced tier-one makers may not survive over the next couple of years.
Average polysilicon prices are forecast to start to stabilize in 2013 at around US$21/kg,as the remaining players rationalize utilization rates in line with end-market requirements while ensuring that selling prices remain above their cash costs.
"If China's Ministry of Commerce decides to impose anti-dumping and countervailing duties on polysilicon imports,prices are likely to increase,"added Annis."However,this will only help a limited number of local Chinese polysilicon producers.It will hurt not only foreign producers but many Chinese wafer,cell and module makers.Also,it will not help to resolve the polysilicon oversupply issue and could restrict end-market growth due to higher prices."
In addition to import duties,any increase in polysilicon prices will likely be limited by first-tier supply sufficiency and end-market demand for the next couple of years.However,tier-one polysilicon producers continue to plan for longer term solar involvement,where low cost structures,economies of scale,and continuously improving productivity are expected to yield benefits as shipment volumes grow.
