Due to the expansion of polysilicon production capacity and the resulting rapid decline in product prices, the cost of solar cells and microchips has also dropped significantly. Bloomberg statistics show that polysilicon prices have fallen to 33 US dollars / kg, down 93% from 475 US dollars / kg three years ago.
Macquarie Group analysts Robert Schramm-Fuchs and Shai Hill pointed out that because the top five global polysilicon manufacturers have expanded their production capacity, global polysilicon demand will only account for 72% of supply next year, implying that 28% of products will be backlogged, which is 20% higher than this year's. .
According to Paul Leming, director of research at Ticonderoga Securities, “Polysilicon is a very, very, very serious commodity that is in oversupply. We expect polysilicon prices to linger around the cost line in the coming years.â€
The rapid decline in polysilicon prices is squeezing the profits of polysilicon manufacturing giants such as Hemlock Semiconductor and Wacker Chemicals. Solar cell manufacturers, including JA Solar and Suntech Power, have also exacerbated the decline in prices of downstream products, causing the bankruptcy of three US solar companies.
On October 28, WACKER's CEO Rudolf Staudigl told investors in a conference call: "It's safe to say that the fantasy of solar energy development is hindered by reality. As for how long the polysilicon downturn will last, I can't Reply."
Polysilicon occupies 1/4 of the total cost of solar panels. The solar industry consumes about 90% of polysilicon, which is also the raw material for most computer chips.
The decline in the prices of various products in the solar energy supply chain since February of this year has caused BloombergGlobalLeadersSolarIndex to drop by 60%, causing suspicions that the industry will set off a wave of closures or mergers and acquisitions in the coming months. Q-CellsSE, the world's largest manufacturer of solar cells, said that any purchase initiated by any company will not be rejected.
Robert Schramm-Fuchs and Shai Hill said in a report issued to investors on November 8th: “There are currently 66 polysilicon manufacturers, nearly two-thirds of which will fail; 35 polysilicon manufacturers in the next three years will only have Four survived."
Xie Chen, an analyst at the China Nonferrous Metals Association Silicon Industry Branch, revealed that nearly 90% of China's polysilicon manufacturers will have to temporarily suspend production due to falling prices. These companies contribute 50% of China's production capacity.
A polysilicon giant Hemlock in Tennessee will start operations next year, when its capacity will increase by 28%. Since 2008, Hemlock has increased its production capacity by 89%. Hemlock is powered by Dow Corning, Shin-Etsu Handotai and Mitsubishi Materials Corp. Co-investment establishment.
At present, the top five polysilicon manufacturers in the world are Wacker Chemie of Germany, OCI of South Korea, GCL-Poly China, and REC of Norway. Last year, the total capacity of these five companies was 131,000 tons, which was more than double the 50,000 tons in 2008.
Woo-Hyun Lee, chief operating officer of OCI of South Korea, said in an interview: “I haven’t encountered an industry like solar energy. The price drop is so fast that it hit us very hard. Now the space for floating is very small.â€
So far this year, OCI has fallen by 60% in the Korean stock exchange market, while Wacker Chemical's drop has also reached 46%.
Product prices plummeted Sean McLoughlin, an industry analyst at HSBC, revealed that polysilicon spot prices may fall from the current $33/kg to more than $20, and stay at $30/kg after undergoing industry consolidation in 2012. PaulLeming said that polysilicon prices will drop to US$25/kg within three weeks, and it is predicted that this level will be maintained for at least two years.
HSBC analysts said that nearly 90% of the polysilicon is signed with long-term contracts, the cancellation of the contract will have to pay more than 20% of the total cost of the product.
Profit reduction According to Bloomberg's survey of five analysts, the profit rate of Wacker Chemical in the fourth quarter of 2011 decreased by 4 percentage points from the third quarter to 21%. McLoughlin revealed that REC has developed a technology that can effectively reduce production costs. Using this technology can greatly reduce product manufacturing time and energy consumption.
Polysilicon has been used as a semiconductor for computer chips for decades, but supply has only begun to tighten after European countries introduced renewable energy subsidies. In March 2008, polysilicon prices rose to 475 US dollars / kg, which triggered a wave of industry expansion.
When solar energy subsidies reduced the demand for solar panels, the once-shortened polysilicon became a surplus.
Expansion of production When the polysilicon spot price reached 178 US dollars per kg in 2008, Hemlock announced that it will build a new factory. By 2013, Wacker Chemical will increase production capacity to 60,000 tons; and LDK, the world’s second-largest wafer maker, announced that it will build a plant in Inner Mongolia to increase production capacity to 55,000 tons.
In an interview, WACKER polysilicon president Ewald Schindlbeck said that by 2014 global polysilicon production capacity will reach 500,000 tons; this year, global polysilicon production capacity will be 266,000 tons.
Even in a sector with a profit of up to 40%, the decline in polysilicon prices is also affecting small businesses. Last month, PVCrystalox Solar announced that it would cut production and lay off employees.
Rudolf Staudigl stated that Wacker Chemist is negotiating contracts with customers to assess their creditworthiness. Chockof Bachmair, a spokesman for WACKER chemistry, revealed that the total amount of contracts held by WACKER CHEMICAL is sufficient for its production by 2015.
AxiomCapitalManagement analyst GordonJohnson said that although Wacker Chemie and other major polysilicon manufacturers may reach a fixed price agreement with their customers, the polysilicon manufacturers will also suffer a great loss if these customers go bankrupt. "Polysilicon prices have also dropped significantly, and some companies will certainly go bankrupt."
Macquarie Group analysts Robert Schramm-Fuchs and Shai Hill pointed out that because the top five global polysilicon manufacturers have expanded their production capacity, global polysilicon demand will only account for 72% of supply next year, implying that 28% of products will be backlogged, which is 20% higher than this year's. .
According to Paul Leming, director of research at Ticonderoga Securities, “Polysilicon is a very, very, very serious commodity that is in oversupply. We expect polysilicon prices to linger around the cost line in the coming years.â€
The rapid decline in polysilicon prices is squeezing the profits of polysilicon manufacturing giants such as Hemlock Semiconductor and Wacker Chemicals. Solar cell manufacturers, including JA Solar and Suntech Power, have also exacerbated the decline in prices of downstream products, causing the bankruptcy of three US solar companies.
On October 28, WACKER's CEO Rudolf Staudigl told investors in a conference call: "It's safe to say that the fantasy of solar energy development is hindered by reality. As for how long the polysilicon downturn will last, I can't Reply."
Polysilicon occupies 1/4 of the total cost of solar panels. The solar industry consumes about 90% of polysilicon, which is also the raw material for most computer chips.
The decline in the prices of various products in the solar energy supply chain since February of this year has caused BloombergGlobalLeadersSolarIndex to drop by 60%, causing suspicions that the industry will set off a wave of closures or mergers and acquisitions in the coming months. Q-CellsSE, the world's largest manufacturer of solar cells, said that any purchase initiated by any company will not be rejected.
Robert Schramm-Fuchs and Shai Hill said in a report issued to investors on November 8th: “There are currently 66 polysilicon manufacturers, nearly two-thirds of which will fail; 35 polysilicon manufacturers in the next three years will only have Four survived."
Xie Chen, an analyst at the China Nonferrous Metals Association Silicon Industry Branch, revealed that nearly 90% of China's polysilicon manufacturers will have to temporarily suspend production due to falling prices. These companies contribute 50% of China's production capacity.
A polysilicon giant Hemlock in Tennessee will start operations next year, when its capacity will increase by 28%. Since 2008, Hemlock has increased its production capacity by 89%. Hemlock is powered by Dow Corning, Shin-Etsu Handotai and Mitsubishi Materials Corp. Co-investment establishment.
At present, the top five polysilicon manufacturers in the world are Wacker Chemie of Germany, OCI of South Korea, GCL-Poly China, and REC of Norway. Last year, the total capacity of these five companies was 131,000 tons, which was more than double the 50,000 tons in 2008.
Woo-Hyun Lee, chief operating officer of OCI of South Korea, said in an interview: “I haven’t encountered an industry like solar energy. The price drop is so fast that it hit us very hard. Now the space for floating is very small.â€
So far this year, OCI has fallen by 60% in the Korean stock exchange market, while Wacker Chemical's drop has also reached 46%.
Product prices plummeted Sean McLoughlin, an industry analyst at HSBC, revealed that polysilicon spot prices may fall from the current $33/kg to more than $20, and stay at $30/kg after undergoing industry consolidation in 2012. PaulLeming said that polysilicon prices will drop to US$25/kg within three weeks, and it is predicted that this level will be maintained for at least two years.
HSBC analysts said that nearly 90% of the polysilicon is signed with long-term contracts, the cancellation of the contract will have to pay more than 20% of the total cost of the product.
Profit reduction According to Bloomberg's survey of five analysts, the profit rate of Wacker Chemical in the fourth quarter of 2011 decreased by 4 percentage points from the third quarter to 21%. McLoughlin revealed that REC has developed a technology that can effectively reduce production costs. Using this technology can greatly reduce product manufacturing time and energy consumption.
Polysilicon has been used as a semiconductor for computer chips for decades, but supply has only begun to tighten after European countries introduced renewable energy subsidies. In March 2008, polysilicon prices rose to 475 US dollars / kg, which triggered a wave of industry expansion.
When solar energy subsidies reduced the demand for solar panels, the once-shortened polysilicon became a surplus.
Expansion of production When the polysilicon spot price reached 178 US dollars per kg in 2008, Hemlock announced that it will build a new factory. By 2013, Wacker Chemical will increase production capacity to 60,000 tons; and LDK, the world’s second-largest wafer maker, announced that it will build a plant in Inner Mongolia to increase production capacity to 55,000 tons.
In an interview, WACKER polysilicon president Ewald Schindlbeck said that by 2014 global polysilicon production capacity will reach 500,000 tons; this year, global polysilicon production capacity will be 266,000 tons.
Even in a sector with a profit of up to 40%, the decline in polysilicon prices is also affecting small businesses. Last month, PVCrystalox Solar announced that it would cut production and lay off employees.
Rudolf Staudigl stated that Wacker Chemist is negotiating contracts with customers to assess their creditworthiness. Chockof Bachmair, a spokesman for WACKER chemistry, revealed that the total amount of contracts held by WACKER CHEMICAL is sufficient for its production by 2015.
AxiomCapitalManagement analyst GordonJohnson said that although Wacker Chemie and other major polysilicon manufacturers may reach a fixed price agreement with their customers, the polysilicon manufacturers will also suffer a great loss if these customers go bankrupt. "Polysilicon prices have also dropped significantly, and some companies will certainly go bankrupt."
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