FocusAsia polysilicon to remain soft on global oversupply

28 June 2012 03:55  [Source: ICIS news]

By Samuel Wong

SINGAPORE (ICIS)--Polysilicon spot prices in Asia are likely to remain depressed this year because of an oversupply in the global market, and with China – a key market for the product – possibly slapping antidumping duties on imports from the US and South Korea, market sources said on Thursday.

Spot prices of polysilicon were assessed at $19-22/kg (€15-18/kg) FOB (free on board) NE (northeast) Asia on 27 June, down by 62% from the same period a year ago, according to ICIS.

Current prices are a far cry from the $300/tonne levels seen in 2007-2008, when the industry faced a severe supply crunch amid a rapidly growing demand for solar power.

Incentives on solar projects were withdrawn at the onset of the global financial crisis in late 2008, causing polysilicon prices to plummet, traders said.

Solar polysilicon feedstock is used to manufacture mono/multi-crystalline ingots, wafers, solar cells and solar panels.

One megawatt (MW) of photovoltaic power requires seven tonnes of polysilicon material, which is traded in chunks, rods and granules.

The market environment remains challenging and tough, according to market participants.

In China, polysilicon prices on a delivered (DEL) basis fell by 53% from June last year to yuan (CNY) 165,000-170,000/tonne ($25,943-26,730/tonne) in the week ended 27 June this year, ICIS data showed.

“Even though demand is stable, there is currently an oversupply in the market, and as a result, it is pushing prices lower,” said a producer.

Excess inventories in the global market may last until end-2013, according to a number of producers. Only when supply stabilises that prices can rebound, they said.

At present, the entire photovoltaic chain suffers from hefty inventories, and the buy-sell gap for polysilicon continues to widen, muting trading activities.

Buying ideas were below $20/kg FOB NE Asia, but selling ideas stayed firm at $22-23/kg FOB NE Asia.

“Levels below the $20/kg mark are not workable, as our margins are already squeezed,” said a producer.

Offers were heard at an average of $21.45/kg FOB NE Asia, according to several Chinese buyers.

There are market talks that Chinese polysilicon companies are seeking antidumping tariffs on imported material from the US and South Korea, but these could not be immediately confirmed.

“If the government imposes such a move [antidumping duty], the downstream market is likely to suffer at the end of the day,” a buyer said.

“The higher costs would most likely be passed on to consumers, as end-users are likely to increase their final product prices as a result of higher costs from importing polysilicon from abroad,” said a northeast Asian producer.

In May, China has imported 7,896 tonnes of polysilicon, a 50% year-on-year increase and a 28% rise from April, according to China Customs data.

($1 = €0.80 / $1 = CNY6.36)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Samuel Wong

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