According to EnergyTrend, a research division of TrendForce, with the global PV industry in a state of oversupply, price has plummeted in 2011 – most noticeably in the second half of the year. Furthermore, the negative effects have spread to the upstream polysilicon sector as well. EnergyTrend’s data reveals that polysilicon spot price showed slight increases in 1H11, and polysilicon manufacturers temporarily enjoyed the title of “most profitable” in the industry. However, with the addition of new capacity and continued weak demand, polysilicon price has dropped sharply since 3Q. Currently, average price has fallen below the US$30/kg threshold, a figure lower than most mid and small-scale makers’ manufacturing costs.
Downstream solar cell and wafer manufacturers are eagerly reducing on-hand inventory by dumping on the spot market, causing spot price to fall to new lows. Caught between large-scale manufacturers and downstream clients, with prices that do not provide a competitive advantage, more and more mid and small-scale polysilicon makers are becoming increasingly aggressive about clearing inventory as well as temporarily cutting capacity to decrease losses. As mid and small-scale makers withdraw from the market for the time being, only large-scale manufacturers will remain, which will hopefully restore some order to the industry. EnergyTrend believes this will help gradually stabilize polysilicon price.
On the other hand, Si wafer manufacturers’ inventory levels continue to decrease. According to EnergyTrend’s research, for the majority of manufacturers in both China and Taiwan, inventory levels have already reached an acceptable range. Currently, few manufacturers have over ten million wafers in stock, and those who do continue to clear their inventory. EnergyTrend believes that the status of the Si wafer industry is similar to that of the polysilicon industry in the following respect: mid and small-scale makers without a competitive advantage are temporarily ceasing production, and it is possible that Si wafer price will stabilize as only major manufacturers with inventory to clear remain on the market.