China reportedly will announce the preliminary anti-dumping verdict against US- and South Korea-based polysilicon firms in first-quarter 2013. This will affect the supply chain, which has already been fluctuating in recent years. Most solar makers have agreed that it has been hard to predict market condition.
China has been said to be set to conclude the anti-dumping investigation by imposing a punitive tariff around 30-50%, or even more. The high tax rate will affect domestic polysilicon price.
The tariff will likely reduce the amount of polysilicon imported into China, causing downstream firms to rely heavily on domestic suppliers. This may drive up China's domestic polysilicon price. Solar makers added that China's tier-one material firms have production cost around US$18-20/kg. At the beginning of the investigation, the spot price was above US$20/kg. At the time, tier-one makers said their material prices would not be adjusted along with the results of the investigation to ensure downstream firms' competitiveness. They were also hoping that keeping the prices low would weed out weaker competitors.
However, the price of material has continued to drop and the spot price has dropped below production cost. This has been pushing tier-one firms to reduce production. Therefore, it is likely for tier-one material firms to increase price after the preliminary verdict is announced. China-based solar material firms predict the price will likely increase to US$18-20/kg, a 20-30% jump compared to the current spot price of US$15/kg.
Tier-one firms, nevertheless, are unlikely to let their prices go up too high, preventing tier-two and tier-three competitors (with production cost around US$30/kg) from reviving production.
On the other hand, due to entry barrier to China's market, there will likely be oversupply of polysilicon in non-China markets, meaning prices in these regions are likely to fall.
Meanwhile, China-based vertically integrated solar firms have been facing entry barriers in the US market and may face similar barriers in the EU market. The firms have been issuing OEM orders to Taiwan-based solar wafer firms. The integrated firms have been asking international material firms to ship material directly to Taiwan-based solar wafer firms. The finished solar wafers will then be shipped to Taiwan-based solar cell firms. The finished solar cell will then be shipped back to China or other solar module plant for assembly.
