The World's #1 Renewable Energy Network for News, Information, and Companies.

Tier 1 Polysilicon Producers Rationalize Supply to PV Industry

Polysilicon suppliers to the solar photovoltaic (PV) industry have been significantly lowering plant utilization rates during the past six months, with average quarterly utilization rates falling below 70 percent, as released in the latest NPD Solarbuzz Q4'12 Polysilicon and Wafer Supply Chain Quarterly Report.

This contrasts with historic plant utilization rates at above 90 percent typically provided by the leading polysilicon suppliers to the solar PV industry. Even when polysilicon spot prices declined 70 percent between Q1'11 and Q2'12, Tier 1 polysilicon suppliers maintained these high utilization rates.

Polysilicon makers strive to run plants at optimal capacity levels, where maximizing production offers the lowest cost structures by spreading depreciation costs over a larger volume. This often results in the highest yields, avoids shutdown/start-up costs, and enables volume purchases of raw materials.

Accordingly, polysilicon suppliers maintained high utilization rates while prices remained above cash costs. When average spot prices fell below $20/Kg in Q3'12, and continued down to $16/Kg in Q4'12, even Tier 1 makers with best-of-class cost structures were forced to adjust production levels.

China, the world's largest end-market, consumed approximately 188,000 tons of polysilicon for PV applications between Q1'11 and Q3'12. However, during the same time period, 262,000 tons of materials were provided to the Chinese market from a combination of domestic production and foreign imports.

In particular, foreign imports grew to record highs during most of 2012. As a result, the 74,000 tons of excess supply contributed to a strong inventory buildup and, combined with weaker than hoped end-market PV demand during 2H'12, ultimately led to the recent utilization corrections.

 

 

Tier 1 polysilicon maker plant utilization. Source: NPD Solarbuzz Q4'12 Polysilicon and Wafer Supply Chain Quarterly Report

 

The reduced utilization rates have also had a profound impact on the previously aggressive capacity expansion plans of PV polysilicon suppliers. In fact, several Tier 1 polysilicon manufacturers, including Wacker, Hemlock, OCI, and Tokuyama, have now decided to delay ramping up and building new polysilicon plants.

The rationalization of supply finally started stabilizing polysilicon prices towards the end of Q4'12, and this trend continues into early Q1'13. Even so, price pressure is expected to remain strong with polysilicon makers hoping to increase utilization rates as early as possible. Moreover, several polysilicon plants are still currently scheduled for completion, but this new capacity is likely to remain idle until end-market PV demand increases.

This article was originally published on NPD Solarbuzz and was republished with permission.

RELATED ARTICLES

Renewable Energy Finance

Clean Energy ETFs Are on a Tear

Eric Balchunas, Bloomberg Green investing used to be synonymous with losing money. But while the S&P 500 Index is up 2 percent this year, and the MSCI All-Country World Index is up 5 percent, clean energy ETFs have double-digit re...

Wheels, Towers and Trees: Unconventional Renewable Energy Technologies in the Pipeline

Andrew Williams, International Correspondent A number of companies around the world are developing novel technologies in an effort to grab a slice of the global renewable energy market.  Although many of these technologies are simple incremental improvements to e...
UK Parliament Clean Energy Leaders

UK Government Names Clean Energy Cabinet Members

David Appleyard, Contributing Editor With the UK general election now over and a majority Conservative Party government in place, the re-elected Prime Minister David Cameron has now named key members of the government charged with steering the UK’s clean energ...
Microgrids

Coast to Coast and Across the Electric System, Microgrids Provide Benefits to All

Dick Munson, Environmental Defense Fund At the most obvious level, microgrids could disrupt today’s utilities and their regulated-monopoly business model, because they challenge the centralized paradigm. In a nutshell, microgrids are localized power grids that ha...

CURRENT MAGAZINE ISSUE

03/01/2015
Volume 18, Issue 3
file

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

EU PVSEC 2015 (European PV Solar Energy Conference and Exhibition)

The EU PVSEC is the largest international Conference for Photovoltaic re...

CA Wine Industry's 2015 Solar Update- WEBINAR

Proceeds from event registration will go to the CA Sustainable Win...

Energy Security: Opportunity Power with the Sunny Boy Secure Power ...

Wouldn’t it be great to have a grid-tied inverter that could still...

COMPANY BLOGS

EU PVSEC 2014: Call for Papers Receives Great Response

More than 1,500 contributions apply for presentation in AmsterdamScienti...

EU PVSEC 2014 extends its Scope

Added focus on application and policy topicsAbstracts for conference con...

Solar Impulse Flying From China to Hawaii

The team behind Solar Impulse, the solar-powered airplane, is prepa...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS