When the price of polysilicon fell below US$100/kg for the first time last month, an industry insider predicted to this reporter that the price may fall to US$80/kg in the future. Unexpectedly, after just a month, this scene really happened. The reporter learned from British New Energy Finance Company last week that the spot price of polysilicon has dropped to 80 US dollars/kg in this month, which means that the difficult years of the photovoltaic industry have not yet ended.
With the global photovoltaic industry booming, the demand for polysilicon has increased rapidly at a rate of over 40% per year in the past 10 years. In the market conditions that are in short supply, the spot price of polysilicon climbed from 35 US dollars per kilogram in 2005 to the highest peak in history of 480 dollars per kilogram in 2008.
Driven by huge profits, domestic companies have started to launch polysilicon projects. The data shows that as many polysilicon projects were put into operation in China last year, the annual output has reached more than 4,000 tons, which greatly eased the shortage of polysilicon raw material supply in the photovoltaic industry chain, and at the same time also promoted the decline of polysilicon prices in the Chinese market.
However, in the second half of last year, the international financial tsunami unexpectedly emerged. PV companies' overseas markets shrank sharply and the pace of expansion slowed down. These unfavorable factors have completely loosened the price base of polysilicon. According to the New Energy Finance silicon and wafer price index, the weighted average price of polysilicon forward contracts fell by 30% to US$107/kg in 2008 compared with 2008, and spot prices have dropped to US$80/kg in April 2009. At the same time, some companies are currently under construction of polysilicon projects slowed down the construction progress, and some projects that have not been started yet are cancelled. The industry believes that projects that have been completed after the third quarter of 2008 will have investment returns that are much lower than expected. As for projects that do not have enough technology and are not large enough, they will face a dilemma.
According to Wei Qidong, secretary general of the Photovoltaic Industry Association of Jiangsu Province, domestic polysilicon costs generally range from US$50 to US$70/kg, and individual companies without closed-loop production cost US$100/kg.
“Originally, the industry expects that the polysilicon industry reshuffle will appear in 2010, but in fact, this moment is likely to have arrived earlier.” An industry source said.
However, Peng Xiaofeng, LDK chairman of LDK, believes that if the price of polysilicon continues to fall, more people will use solar power to help expand the market size. This will have a positive effect on the industry, so the crisis is also Turnaround.