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Polysilicon producers start showing profits as pricing strengthens amidst strong demand

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Polysilicon back to profits

Polysilicon companies are starting to show profits again after polysilicon pricing has started to strengthen amidst higher demand from downstream solar cell makers. While electronic demand for poly remains more or less same at the 25-30,000 ton level yearly, solar demand has spurted to more than 200,000 tons. The glut in poly capacity has also started to reduce with many of the smaller unprofitable makers shutting capacity. Some of the older plants such as the Merano plant in Italy of SunEdison (SUNE) has also been mothballed.

Small poly plants of capacities ranging 2000-3000 tons are not profitable and most of the solar wafer makers who set up these have shut them down. This has led to some 5-10% rationalization in capacity. Solar panel demand in the world has also gone up substantially to ~35 GW in 2013, which can increase to nearly 50 GW in 2014. Most of the large poly makers are now increasing their utilization to 80%. This has led to an improvement in both sales and margins. Wacker reported some very good results in its poly division, while Hemlock also indicated that profits were returning. The big poly makers such as OCI and Wacker are now planning to expand capacity which they had frozen during the midst of the downturn. Poly costs have been reduced continuously by the companies through innovative supply chain and technological improvements. This means that poly prices will remain in the $20-30 kg level and it is doubtful whether they go to the $400/kg level seen in 2008. But even at $30/kg, some companies such as GCL can make 60% plus gross margins which is a lot for a commodity industry.

One other good thing about the polysilicon industry now is that smaller players are not likely to enter this industry with many of them having burned their fingers. Billions of dollars in poly investment have been lost, as companies tried to enter this industry during the solar boom. The big 5 poly companies have survived this downturn in a relatively great shape and can show steady growth as the industry has returned to equilibrium.


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

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