Polysilicon price spirals downward

According to EnergyTrend, a research arm of TrendForce Corp., the stubborn solar market is forcing even the tough European and US manufacturers to give in to a lower long-term contract price for next year. The lowest quoted price was $40/kg, which Asian and other second-tier makers will also reach by 4Q11. Downstream manufacturers stated that the price adjustment is due to the oversupply situation and not a sign of growth.

In terms of raw materials, EnergyTrend indicates that as polysilicon makers are shipping aggressively, more companies are dumping their excess contract goods on the spot market. This has caused prices to plummet, and some have given quotes lower than $40/kg. Weak demand and polysilicon makers insisting that clients honor their contracts are the main factors that caused low price and oversupply on the spot market. Although polysilicon manufacturers have also quoted $40/kg contract prices, makers said that unless demand rises, there will continue to be few transactions.

With regard to the Si wafer spot market, prices as low as $1.5/piece have been quoted in hopes of attracting buyers. However, this strategy has not been successful because solar cell manufacturers' material from long-term contracts is enough to fulfill the demand. The low price is driven by traders and makers trying to get rid of excess inventory. Notably, the previous mono-Si wafer price uptrend has reversed, and mono-Si wafer price is the same as multi-Si wafer quotes for September.

As for this week's spot prices, polysilicon, Si wafer and solar cell quotes are all showing downward trends. In terms of polysilicon, the quoted ASP was $46.58/kg, representing a 4.18 percent decrease. With regard to Si wafers, multi-Si wafer prices decreased noticeably this week, with $1.6/piece and an ASP of $1.814/piece, representing a 3.05 percent. The mono-Si wafer price approached $2/piece, with ASP decreasing by 1.52 percent to $2.398/piece. As for solar cells, the lowest multi-Si solar cell quote was $0.66/W. The lowest mono-Si solar cell price remained at $0.72/W, while ASP decreased by a slight 1.81 percent to $0.704/W.

Looking toward the future, EnergyTrend believes that the price war for the polysilicon industry has begun and major manufacturers will be using economies of scale to push out newcomers. When price reaches $40/kg, the polysilicon industry will enter elimination phase. The development of Chinese manufacturers will be a point of focus. Makers that are unable to acquire enough capital will be eliminated. On the other hand, if current expansion strategies are executed as planned, the industry will remain in a state of severe oversupply.