SUN’S SILICON OVERSUPPLY GOES ON

No End in Sight for Polysilicon Over-Supply; NPD Solarbuzz Forecasts Tier 1 Polysilicon Production Will be Greater than PV Industry Requires in 2012

October 1, 2012 (SolarBuzz)

“Despite the fact that most leading polysilicon producers have been operating at a loss, polysilicon capacity is expected to grow 22% in 2012 and a further 18% in 2013…Average industry-wide polysilicon prices for photovoltaic (PV) applications are forecast to drop 52% in 2012, while plant utilization is expected to decline from 77% in 2011 to 63%...

“Total polysilicon capacity will exceed 385,000 tons in 2012, of which 70% is held by a small number of tier 1 producers. In fact, these tier 1 providers alone are forecast to satisfy all polysilicon demand… for the next few years.”

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“Unless end-market demand provides a strong upside surprise to expected polysilicon requirements, many of the 57 tier 2 and 3 producers are likely to exit the industry within the next 18 months. Indeed, even a few of the less-experienced tier 1 makers may not survive…Average polysilicon prices are forecast to start to stabilize in 2013 at around $21/Kg, as the remaining players rationalize utilization rates in line with end-market requirements…

In addition to import duties, any increase in polysilicon prices will likely be limited by first tier supply sufficiency and end market demand for the next couple of years. However, tier 1 polysilicon producers continue to plan for longer term PV involvement, where low cost structures, economies of scale, and continuously improving productivity are expected to yield benefits as shipment volumes grow…”

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