FocusAsia polysilicon prices to fall below $50/kg on weak demand

25 August 2011 05:14  [Source: ICIS news]

By Felicia Loo

SINGAPORE (ICIS)--Asian polysilicon prices are expected to drop to below $50/kg (€35/kg) FOB (free on board) northeast (NE) Asia in the coming weeks amid high stockpiles of photovoltaic materials in China and prevailing weak demand, market players said on Thursday.

Spot prices of polysilicon, which is the feedstock for making solar wafers, cells and modules, fell by $2/tonne in the week ended 24 August to $50-54/kg FOB NE Asia, according to ICIS data.

In China, spot polysilicon was traded at around yuan (CNY) 400,000/tonne ($62,600/tonne) this week, compared with CNY470,000-490,000/tonne a month ago.

“Spot demand will weaken in the next two months,” said one trader.

In a sign of a bearish market, some term polysilicon lifters have resorted to reoffering and reselling contracted cargoes in the spot market, industry sources said. A few of the smaller photovoltaic companies in China, with a capacity of 200-300MW each, have either slashed their operating rates or shut their plants entirely because of falling downstream prices, they added.

The prices of 156mm2 multi-wafer fell to $1.90-2.10/piece this week from $2.05-2.25/piece a week ago, according to ICIS data.

“Inventories of solar modules are still high in Europe. Their import demand is weak,” said another industry source.

Supply is seen to be outpacing demand and more capacity will surface in the market in the fourth quarter, sources said.

German polysilicon maker Wacker Chemie will increase the capacities of its two facilities by around 5,000 tonnes/year each by 2012 through debottlenecking measures. Production capacity at Burghausen will be increased to 37,000 tonnes/year, while capacity at the Nunchritz polysilicon facility, which is due to come on stream by the end of the year, will be raised to 15,000 tonnes/year.

Despite the positive long-term outlook for polysilicon demand, most market players conceded that September is the most critical period as it will set the tone for the price trend for the Chinese domestic polysilicon market in the last quarter of the year.

China-based Trina Solar’s net profit plunged by 70% year on year to $11.8m in the second quarter of 2011 as its total operating expenses soared, the solar photovoltaic product maker said this week.

The firm’s overall operating expenses surged by 84% year on year to $65.5m in the three-month period ending 30 June, the company said in a statement. Its net revenues in the second quarter, meanwhile, rose by 56.3% year on year to $579m. However, any advantage from higher revenues was offset by higher costs in the second quarter of 2011, the company said.

The solar company’s total shipments of photovoltaic modules were 396.4MW compared with 222.8MW in the second quarter of 2010. For the third quarter of 2011, the company expects to ship between 480MW and 520MW of photovoltaic modules, the statement added.

($1 = €0.69, $1 = CNY6.39)

For more on polysilicon, visit ICIS chemical intelligence

By: Felicia Loo

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