EnergyTrend indicates that although PV industry is entering the traditional off-peak season, demand is likely to remain strong due to the 4Q13 performance. The utilization rate for major manufacturers in both Taiwan and China remains high, and their demand toward upstream raw material is still strong. It causes polysilicon market trade to stay active recently, with spot price rising continuously.
As indicated by EnergyTrend’s investigation, it’s not possible for polysilicon price to increase substantially in the short run. Meanwhile, most of the manufacturers are optimistic about the overall PV market in 2014, projecting demand from Japan and China will continuously increase. Furthermore, with Western markets demanding more high-efficiency products, manufacturers have started to shift their focus toward this area. On the other hand, since the utilization rate for major manufacturers has almost or already reached 100%, many of them have initiated capacity expansion plans, which helped raise upstream raw material demand and pulled up the spot price. Because of these developments, polysilicon manufacturers have turned more stubborn toward the contractual price next year.
EnergyTrend also noticed that auxiliary material supply for polysilicon manufacturers has started to decline. Thus, auxiliary material supply shortage may cause contractual price to increase next year. Yet, the increased range will have to depend on how buyers and sellers negotiate. Based on EnergyTrend’s investigation, suppliers’ target price next year is above US$1.0/kg, while buyers hope to keep the price within US$0.5/kg. EnergyTrend believes buyers and sellers will not stop negotiating in the short run due to their different expectations on price.
In addition to the strong market transactions which allowed manufacturers to revise the price upward, changes within Chinese policies also have large impact toward polysilicon market. According to EnergyTrend’s investigation, China will come up with stricter polysilicon import policies next year. Although China has announced polysilicon anti-dumping and countervailing policy and imposed heavy punitive tariffs on European and US imports this year, Western manufacturers have found loopholes in the government’s so-called “handbook” to avoid the punitive tariffs. As a result of the policies being rendered useless, Chinese polysilicon manufacturers have recently requested for stricter anti-dumping regulations. It’s projected that the Chinese government may cancel or limit the conditions listed in the “handbook” next January. However, based on the current Chinese polysilicon price, simply cancelling the handbook may raise polysilicon price once again and increase the production cost for downstream manufacturers. Hence, downstream manufacturers are getting ready to oppose it. Whether the stricter regulations will be put into practice next January remains to be seen.
Assuming the “handbook” is cancelled as expected, EnergyTrend believes that polysilicon market may come up with different scenarios:
- In order to maintain the market share in China, foreign manufacturers will revise the customs price downward to stay competitive in the Chinese market. Also, production cost may drop further for manufacturers outside of China.
- Foreign manufacturers maintain basic price and passively lower supply in the Chinese market. The extra capacity may be used for semi-conductor raw material. They may even use legal means to request manufacturers outside of China to comply with relevant contracts. Yet, whether polysilicon price will decrease depends on the result of negotiation.
Judging from the spot market’s overall performance, since Chinese polysilicon price remains high and suppliers’ quotation continues to increase in December, this week’s price reflects an uptrend. For multi-si wafers, supply shortage remains for high-efficiency products. Also, Chinese manufacturers have revised the price upward, which causes spot price to continuously rise. For mono-si wafers, demand still reflects a downtrend with this week’s average price. For cells, full-production status remains for major manufacturers. Yet, certain manufacturers have chosen to lower the price. For modules, buyers have become more cautious. Moreover, module price in Japan continues to decline with this week’s average price. Affected by the decreased module price and weak thin-film demand, this week’s thin-film average price declined with a 0.64% drop.