FocusAiling solar market to drive down Asia polysilicon prices

01 November 2012 05:42  [Source: ICIS news]

By Felicia Loo

Solar panelsSINGAPORE (ICIS)--Asia’s spot polysilicon prices look set to weaken further given an ailing solar market that is awash with raw material supply, market participants said on Thursday.

Demand for polysilicon – which is being processed to make solar wafers, cells and modules – remains sluggish, and it has been further dampened by the increasing trade row between China and the US, as well as the EU, they said.

“Things have been bad. Demand is still weak, very weak,” said a Chinese market player.

Spot polysilicon prices in Asia fell by $1/kg at the lower end of range in the week ended 31 October to $15-17/kg (€12-13/kg) FOB (free on board) NE (northeast) Asia, according to ICIS data.

Around the same time last year, prices were about double their current levels at $30.50/kg FOB NE Asia, the data showed.

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

In China, domestic polysilicon prices were assessed at yuan (CNY) 120,000-130,000/tonne ($19,231-20,833/tonne) on DEL (delivered) basis in the week ended 31 October 2012, the data indicated.

“Prices have fallen incrementally to a point where it is no longer a profitable business. The producers only want to sell away existing (polysilicon) stocks to get back cash,” said another player.

The solar industry in China was further hit after the US announced the final anti-dumping duties (ADD) – ranging from 18.32% to 249.96% – on imports of Chinese solar cell products. The US also set the final countervailing duties at a range of 14.78% to 15.97% for Chinese producers and exporters of the products.

In early September, the European Commission launched an antidumping investigation into imports of solar panels and their key components – solar cells and wafers – originating in China. Industry association EU ProSun in a complaint lodged on 25 July this year to the Commission cited that solar panels and their key components imported from China are priced below market value.

The actions of the US and the EU are hurting the photovoltaic (PV) industry at a time of overcapacities of solar panels, industry players said.

“It is very difficult to sell products to the US and Europe,” said a solar module maker in China.

Solar cells and modules makers in China are operating their plants at less than 50% of capacity, and a number of China-based polysilicon producers had shut plant operations, market participants said.

The slump in the solar sector has ineluctably led to weaker balance sheets of global industry players.

US’ DuPont’s third-quarter sales in its electronics and communications business, which include the company's PV operations, were down 28% year on year to $607m, with volumes down 20% and prices down 8%.Sequentially, DuPont’s third-quarter PV sales fell because of inventory destocking throughout the PV value chain.

Germany’s Wacker Chemie reported a 78% year-on-year fall in net profit to €26.9m ($34.9m) in the third quarter of 2012 from €124.9m in the third quarter of 2011. Increased sales and revenues across most of Wacker Chemie’s chemicals divisions have helped to offset the impact of a slump for the company’s polysilicon and silicon wafer businesses.

US-based specialty chemicals producer Ferro reported a third-quarter net loss of $316.1m because of lower sales and higher one-time charges. Ferro reported a third-quarter restructuring and impairment charge of $198.8m, compared with a charge of $869,000 reported for the same time last year. The third-quarter impairment charges were related to the company's electronic materials segment and that segment's solar-pastes business.

($1 = €0.77 / $1 = CNY6.24)

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

By: Felicia Loo

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