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Recent PV Policies Intensify Industrial Concentration in PV Market

published: 2013-09-14 10:10

Many countries have successively announced PV policies recently. While some of the policies aim to increase the amount of solar system installations, others focus on substantially cutting the scope and amount of subsidies. These policies will deeply impact the future development of PV market. According to EnergyTrend, a research division of TrendForce, most PV manufacturers are conservative about the recent market condition in order to carefully evaluate the effect after the PV policies are being implemented. It’s not likely for the manufacturers to execute any plans until the market condition becomes clear. 

According to EnergyTrend’s latest Gold Member Report, due to various market uncertainties, most polysilicon manufacturers have temporarily suspended capacity expansions recently. Only few manufacturers (such as Tokuyama) have completed capacity expansions as planned. Based on EnergyTrend’s investigation, Tokuyama’s phase one capacity of 6,200 tons in Malaysia has mostly been focused on semiconductor products. Only a small amount of products has been provided for PV manufacturers. On the other hand, shipments for the top five global manufacturers (GCL, OCI, Wacker, REC, and Hemlock, in no particular order) represented more than 75% of the global shipment in the first half year. Shipments in the third quarter are likely to remain at the same level. 

In terms of silicon wafers, future orders will mostly go to first-tier manufacturers. With industrial concentration intensifying, first-tier manufacutrers will be able to maintain high utilization rate. Even taking market uncertainties and cost into consideration, the first-tier Chinese manufacturers will still dominate the global market for silicon wafers. Second/third-tier manufacturers can only move toward the niche market or become subcontractors of first-tier manufacturer due to their lack of advantage in both capacity and cost. EnergyTrend estimates that the utilization rate of silicon wafers will be about 60% in 2013 and may reach 70% in 2014.

In terms of cells, due to the rapid changes in the market, most manufacturers have been quickly shifting between self-producing and outsourcing. However, most cell manufacutrers prefer OEM orders to reduce market uncertainties and to pursue more stable cash flow and lower risk. Besides, the elimination and integration of cell and silicon wafer capacities have become clearer. Capacity expansions will not be significant while most of the expansions will be focused on acquisitions. EnergyTrend indicates that the utilization rate of cells in 2013 and 2014 is about 65%, which is not that different.

Judging from spot market’s overall performance, Chinese polysilicon price has remained at the level of RMB130/kg-RMB140/kg, with this week’s average price reaching US$17.0/kg, a 1.8% rise. For silicon wafers, both buyers and sellers are still bargaining over the price. Some manufacturers indicate that they are still hoping to revise price upward but it will have to depend on future market condition. As for normal-grade silicon wafers, given that their price has continued to decline, the average price of multi-si wafers has fallen to US$0.885/Watt, a 0.11% drop. For cells, manufacturers indicate that they may not be able to revise price upward, thus this week’s price remains stable. For modules, this week’s price also remains steady.

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