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After Solar Wafers, will Polysilicon price rise

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Solar wafer producers are having the best 6 months in the last 5 years, as multi wafer prices have increased by 10% in the last 6 months, even as solar panel prices have remained stable. Polysilicon prices have declined or remained static between $12-15 per kg. The reason is the demand supply dynamics have become favorable for solar wafer producers. After such a prolonged period of low prices and margins, there are hardly any large pure play solar wafer producers left in the world. LDK Solar went bankrupt long back, while Renesola converted itself into a panel player and now into a solar developer. Only GCL Poly remains a large wafer producer, with around 15 GW of wafer capacity and backward integration into poly production. Green Energy Technology which is a Taiwanese pure play producer has returned to the black after almost 5 years, as it has benefited from the strong demand of wafers managing to increase prices by around 1-2% every month.

The large solar panel producers like Jinko Solar, Trina Solar, JA Solar and others which had strongly expanded ingot/wafer capacity in the past had stopped doing so, as they could buy it at cheaper prices from outside. Most wafer producers were running high losses and had diversified into other branches of solar production. The result was that there has been hardly any increase in solar wafer/ingot capacity in the last couple of years, even as cell and module capacities have been expanded rapidly. The situation looks to continue, as major companies are still reluctant to expand given the low ROE/ROCE metrics in this business.


Solar wafer maker Green Energy Technology (GET) is likely to swing to profits in first-quarter 2016 after posting net operating losses for 19 consecutive quarters, thanks to strong demand and improved pricing, according to market analysts. Due to continued tight supply of solar wafers, GET has obtained orders with shipments scheduled through April 2016 and stands a chance of hiking quotes by 0.05-0.1% in March, company president Swean Lin said. If global PV installation capacity in 2016 reaches an estimated 60GWp, global supply of solar wafers will remain tight throughout the year, Lin indicated.

Polysilicon on the other hand, has found itself under continuous pressure in the last one year with prices dropping rapidly. One of the reasons have been overcapacity, as most of the idle capacities by Tier 1 producers were ramped up. Technology improvements have also meant that major players could reduce prices. This has meant that prices have stayed near the cash cost of major players. I think it might be a good time to buy stocks of poly players, as that segment should again see a demand supply imbalance going forward. The reason is that major poly players such as Hemlock and REC Silicon have shut down their capacity, due to the Chinese anti-dumping duties on imports of USA made polysilicon. The demand is increasing and capacity is not. It takes the longest amount of time to set up poly capacity as compared to wafer – cell-panel capacities. The supply is inelastic in the short term and we have seen prices climb up as high as $400/kg in 2008, when demand was high and supply low.

REC Silicon has predicted that the solar market might go into a period of heavy shortage in 2017, as inventories are run off in 2016. REC has predicted that there might be a shortage in 2016 also, but that would be met by inventories built up over the last few years.



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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