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Two industry experts have analyzed the current scenario of polysilicon prices in a talk with pv magazine and both agreed that the demand for polysilicon continues to grow faster than supply. The price could decrease from the second quarter and reach more reasonable levels at the end of the year.
Polysilicon prices have risen sharply since February 2021 and have reached unprecedented levels in the last four months, with the average selling price peaking in December at $38/kg excluding VAT.
"Polysilicon prices are surprisingly high at the moment, even though Chinas polysilicon production has increased for the first two months of 2022," Alex Barrows, director of research at research firm Polysilicon, told pv magazine . UK-based market Exawatt. “The production increase was a little less than we expected, and what we hadnt seen coming is very high demand for polysilicon which is a little unusual for the first quarter of the year, which can traditionally be a relatively weak quarter for the polysilicon industry.
According to another polysilicon specialist, Johannes Bernreuter of Bernreuter Research, the ramp-up of new polysilicon production capacities from Chinese producers such as Tongwei, Daqo and GCL-Poly has been slower than expected, while demand continues to grow faster. that offer. “However, according to the latest weekly reports from price data providers, buyers seem to be more reticent about rising prices,” he told pv magazine . "The situation could relax a bit once the production ramp has reached higher volumes and Xintes 20,000-tonne de-choke project comes online."
Bernreuter added that as long as demand remains strong, suppliers will have no reason to make price concessions. “When demand exceeds available capacity, the price is determined by buyers willingness to pay. The market put this provision to the test in 2021,” he underlined.
Barrows explained that there were already some indications of the current trend in prices and demand last year, when rising prices were not followed by falling demand. "On the contrary, demand remained high, especially in the second half of the year, and it remains at unprecedented levels at the moment, which makes the future scenario very difficult to predict, even in the short term," he said. he. “We expect, however, that polysilicon prices may decline over the course of the year, reaching around $20/kg by the end of December. In the longer term, we expect the global polysilicon industry to be able to meet full demand and by the end of 2023 there is likely to be excess capacity. Until then polysilicon prices may be subject to many fluctuations.”
Looking ahead to the end of 2023 and into 2024, Barrows explained that much will depend on how the gross margins of polysilicon manufacturers evolve and how electricity prices in China evolve. “Gross margins should decline as new polysilicon capacity comes online, but electricity prices for some industrial users have recently increased in China,” he added. “If this trend continues, it could increase costs for some polysilicon manufacturers, driving up prices. We currently expect polysilicon prices to drop back to around $10/kg by the end of 2023, but this depends on electricity prices not rising too aggressively.”
Asked if non-Chinese producers can help change the current scenario, Barrows said this will be unlikely, at least in the short term. “The capacity expansions planned during 2022 and 2023 are very focused on China. We could see some capacity in India under the PLI scheme there, but probably not until 2024 or 2025. It is also possible that we will see capacity expansions in the United States if the proposed manufacturing incentives are introduced, ”he concluded. |
