Bookmark and Share

Chinese Solar Raw Material Production to get Consolidated under a few Major Players

0 Comment

The Peaks and Troughs of Polysilicon Prices

China saw a large number of polysilicon plants getting built during the post 2008 solar boom phase, when polysilicon Polysiliconprices ruled at $400/kg. This raw material which is the main component of silicon solar panels saw its price rise exponentially, as demand outstripped supply by a huge margin. This saw the margins of companies such as SunEdison (SUNE) reach 80-90% as the production cost of polysilicon is only $15-30/kg. Almost every solar company in China set out to build small poly plants as they were forced to pay high cost for the raw material. This saw a classic pattern of a commodity industry going from a situation of massive under supply to massive over supply. The poly price has continued to decline in a secular manner from 2009 and now has stagnated at $20/kg.

Read more about Polysilicon Manufacturing Process.

Most of the Chinese producers have shut down their polysilicon plants as they are not competitive with cost mostly in the $30-35/kg range. Their scale is also not competitive with most plants in the 2000-3000 ton range. A number of companies have already wrote down their polysilicon investments and only 4-5 poly producers are still running their plant. LDK Solar (LDK) has been the biggest polysilicon failure in China till date, with its 15,000 ton plant shut for a long time now. The company has invested almost $2-3 billion in the plant and it is not competitive enough to run.

Read on GWI List of World’s 8 Polysilicon Companies. 

The Chinese government knows that it has to desperately look to rationalize the capacity in the solar industry. Hundreds of small solar companies are either bankrupt or very near to the shutting down phase. During boom times every major city and provincial government has encouraged local companies to produce solar panels giving generous subsidies and land. Now that the boom has petered out, most solar companies have been to be found naked. Shutting down unprofitable capacity is imperative as they are not sustainable in the global market. It is unlikely that polysilicon will go back to $40/kg in the near future given the massive capacity created by the large poly producers. I think this is good news for the large competitive poly producers not only in China but also for the rest of the world.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

No Responses so far | Have Your Say!