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PV makers slash capacity to minimize loss

Posted: 21 Nov 2011 ?? ?Print Version ?Bookmark and Share

Keywords:polysilicon price? PV industry? spot market? Si wafer price?

EnergyTrend's recent data hardly reveals any respite for the global PV industry. Remaining in a state of oversupply, price has spiralled down for the year, harshly impacting even the upstream polysilicon sector.

The data of TrendForce Corp.'s research arm of showed polysilicon spot price increasing slightly in 1H11, and polysilicon manufacturers temporarily enjoyed the title of 'most profitable' in the industry. However, with the addition of new capacity and unrelenting weak demand, polysilicon price has sharply plummeted since Q3. The average price has fallen below the $30/kg threshold, a figure lower than most mid- and small-scale makers' manufacturing costs.

polysilicon price

Polysilicon price continues to plummet. (Source: EnergyTrend)

Downstream solar cell and wafer manufacturers are eagerly reducing on-hand inventory by dumping on the spot market, causing spot price to fall to new lows. Caught between large-scale manufacturers and downstream clients, with prices that do not provide a competitive advantage, more mid and small-scale polysilicon makers are becoming increasingly aggressive about clearing inventory. Actions to temporarily cut capacity are undertaken to reduce losses. As mid- and small-scale makers withdraw from the market, only large-scale manufacturers will remain. With any luck, this will restore some order to the industry. EnergyTrend believes this will help gradually stabilize polysilicon price.

On the other hand, Si wafer manufacturers' inventory levels continue to decrease. According to EnergyTrend's research, for the majority of manufacturers in both China and Taiwan, inventory levels have reached an acceptable range. Few manufacturers have more than 10 million wafers in stock, and those who do continue to clear their inventory. Therefore, the lowest Si wafer price has yet to fall below $1.1/piece. EnergyTrend believes that the status of the Si wafer industry is similar to that of the polysilicon industry in the following respect: mid- and small-scale makers without a competitive advantage are temporarily ceasing production, and it is possible that Si wafer price will stabilize as only major manufacturers with inventory to clear remain on the market.

As for this week's spot prices, polysilicon, Si wafer and solar cell price all remain on a downtrend. Lowest polysilicon price was $23/kg, while ASP fell to $28.2/kg, a decrease of 6.31 percent. In terms of Si wafers, lowest multiSi wafer price remained at $1.1/piece, while mono-Si wafer price was $1.6/piece. This week's multiSi wafer price decreased significantly again, with ASP declining by 8.29 percent to $1.195/piece. EnergyTrend believes this price has hopes of stabilizing after the withdrawal of mid and small-scale makers from the market. Mono-Si wafer ASP fell to $1.687/piece, a decrease of 7.66 percent. The lowest solar cell price was $0.43/W, while ASP fell to $0.524/W, a 2.78 percent decrease. In terms of modules, PV module ASP fell by 4.88 percent to $0.935/W. Thin film ASP decreased as well, by 0.93 percent to $0.856.

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