FocusAsia polysilicon prices to firm in 2011 on solar demand

13 January 2011 07:30  [Source: ICIS news]

By Felicia Loo

solar panels in chinaSINGAPORE (ICIS)--Asian prices of polysilicon - the main material used in solar cells and panels - are expected to increase this year, as demand outstrips supply, especially in a burgeoning spot market, industry players said on Thursday.

“I am upbeat about the polysilicon industry. Demand for solar panels is strong,” said a market player in China.

Polysilicon sits on top of the photovoltaic supply chain. It is derived from metallurgical-grade silicon via chemical processes.

One megawatt of photovoltaic power requires seven tonnes, or 7,000kg, of polysilicon material. Polysilicon is traded in chunks, rods and granules.

“Solar module makers want to shore up inventory of polysilicon because for 2011, polysilicon is in bigger demand,” said a market player in Japan.

In a sign of a firm market, China’s LDK Solar - which manufactures polysilicon, mono and multicrystalline ingots, wafers, modules and cells - raised its outlook for the fiscal year 2011 earlier this week.

The company’s fourth-quarter sales outlook jumped by 21% from the top end of its previous estimate of $750m (€570m), while new projected sales for the fiscal year 2011 were 12% higher than its previous estimate of $3.3bn.

Chinese polysilicon demand rose to 60,000 tonnes last year, absorbing 43% of the world’s supply and China is expected to consume more of the product in 2011.

The global solar-grade polysilicon capacity rose to 140,000 tonnes in 2010, up from 90,000 tonnes in 2009, according to an ICIS survey.

South Korea’s largest polysilicon maker OCI plans to invest $1.6bn to expand its polysilicon production to 62,000 tonnes/year by 2012, the company said in a statement late last year. The company's existing capacity stands at 27,000 tonnes/year.

The company’s No 3 plant, with a capacity of 10,000 tonnes/year, would be expanded to 25,000 tonnes/year by the end of 2011.

OCI will build a No 4 plant with a capacity of 20,000 tonnes/year by 2012, according to the statement.

Meanwhile, Japan’s Tokuyama has plans to build a 6,000 tonne/year polysilicon plant in the east Malaysian state of Sarawak by 2013.

The new capacities would cap an increase in the price of polysilicon, market players said.

The last time high prices were seen was in 2007-2008. In October 2008, polysilicon prices peaked at $365.80/kg. Prices later plunged to $51.90/kg in December 2009 following the financial crisis in late 2008.

Meanwhile in China, a spot polysilicon deal was traded at $60-70/kg for a 20 tonne lot in early January, traders said.

Most of the term polysilicon deals in China, which is the world’s top energy user, were locked at $40-50/kg, they added. 

Spot polysilicon prices were higher at $65-70/kg FOB (free on board) northeast Asia, as assessed by ICIS. Spot polysilicon prices were at $50-55/kg in January 2010.

Photovoltaic systems use cells to convert solar radiation into electricity, according to the European Photovoltaic Industry Association (EPIA).

Each cell comprises one or two layers of a semi-conducting material.

When light shines on the cell, it creates an electric field across the layers, causing electricity to flow, based on data from the EPIA.

The greater the intensity of the light, the greater the flow of electricity is, said the EPIA.

($1 = €0.76)

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By: Felicia Loo

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