September 28, 2011 --- The polysilicon industry has seen several changes recently that have been the focus of the industry. Firstly, not only has GCL-Poly Energy’s announced production capacity expansion exceeded expectations, but it is rumored that the company is considering cooperation with Foxconn. Meanwhile, the future trend of polysilicon price is unknown. According to EnergyTrend, a research division of TrendForce, European and American manufacturers who were unwilling to give in on price are beginning to show signs of concession in terms of long-term contract price for 2012, with the lowest quotes down to US$40/kg. As for Asian and other second-tier makers, price is expected to reach US$40/kg in Q4 of this year. Although polysilicon price has been adjusted noticeably, downstream manufacturers indicate that this is a reflection of the oversupply situation and not a positive development.
In terms of raw materials, EnergyTrend indicates that as polysilicon manufacturers are shipping aggressively, more and more makers are dumping their excess contract goods on the spot market. This has caused spot price to plummet, and some manufacturers have already quoted prices lower than US$40/kg. However, related manufacturers indicate that this selling price is not the cause of the current status of the spot market. Weak demand and polysilicon makers insisting that clients honor their contracts are the main factors that have caused low price and oversupply on the spot market. Although polysilicon manufacturers have also quoted US$40/kg contract prices, makers indicate that unless demand rises, there will continue to be few transactions.
Looking towards the future, EnergyTrend believes that price war for the polysilicon industry has begun, and major manufacturers will be using economies of scale to push newcomers out. When price reaches US$40/kg, the polysilicon industry will enter elimination phase; the development of Chinese manufacturers will be a point of focus. Manufacturers that are unable to acquire enough capital will be eliminated, and the status of the industry may improve as a result of elimination of unsustainable enterprises. On the other hand, if current expansion strategies are executed as planned, the industry will remain in a state of severe oversupply.