SPI Day 1 notes: Demand strong, poly prices spiking

Two key themes emerging from meetings with a Credit Suisse analyst at this week’s Solar Power International (SPI) in Los Angeles involve two things on the rise: PV installations in 2H10, and polysilicon pricing.

October 13, 2010 – Two key themes emerging from meetings with a Credit Suisse analyst at this week’s Solar Power International (SPI) in Los Angeles involve two things on the rise: PV installations in 2H10, and polysilicon pricing.

Spot prices for polysilicon are now up to $80-$90/kg, up from $70-$75/kg two weeks ago and just $50-$55/kg in 2Q10, observers Credit Suisse’s Satya Kumar in a research note. Two poly-Si companies told him at SPI that they can find buyers right now for hundreds of tons of polysilicon at $80/kg spot prices “fairly easily.” Chatter at the show suggests spot prices will continue to increase, possibly up to $100/kg for small volumes. More details about 1Q11 silicon pricing trends will come later in the show.

On the other end of the scale is polysilicon producer (and recently made public) Daqo New Energy, whose costs are currently around $31/kg and hopes to lower below $30/kg in 1Q11 — it too is targeting the spot market in 2011, though 3Q prices will be locked in 2Q probably in the $53/kg range, Kumar notes. It, too, says it is “easily able to sell large volumes now for $80/kg.” It expects to produce ~900 tons in 3Q10 and ~750 tons in 4Q, ramping to 1150+ tons in 1Q11.

Other takeaways from the beginning of SPI:

Solar wafer price trends mostly higher. LDK says prices are up to $100-$1.10 on the spot market, with “significant volumes” sold >$0.90/W. Most companies (SOLF is an exception) see cell prices in the $1.35/$1.40/W range, with LDK indicating up to $1.50/W for some transactions. Kumar notes that cell prices were the first to go up during this cycle, followed by wafers and polysilicon — and it’s unclear whether cells will lead the way back down, too.

Module prices stronger too. Module prices are $1.80/$1.85/W now and expected to increase in 4Q10. Trina Solar has reiterated its view of 1Q11 module prices (€1.30-€1.35/W, or $1.80-$1.87), and other companies expect ~$1.80/W levels, assuming current exchange rates.

Downstream mixed, but showing strength. Upstream vendors of silicon wafers, cells, and panels may be bullish, but “downstream contacts so far are a bit more circumspect,” Kumar writes, noting from one major US distributor that near-term supply is “very tight for panels” but is still hesitant to commit its 1Q11 volumes, hoping for price declines. Another US distro/installer agreed that panels are very tight, and that suppliers are trying to raise pricing in 1Q11. A Canadian installer acknowledged supply tightness, but expressed hope that weaker companies will suffer in 4Q, opening the door to some pricing leverage for installers.

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