According to EnergyTrend's report, finds that the average global spot price of polysilicon has surged by 20% between the end of July and the middle of August.
The polysilicon supply has tightened up suddenly because the leading supplier in China had to do an emergency repair at one of its factories. This added to the pressure on the supply caused by annual plant maintenance works carried out by other suppliers.
The squeeze on the polysilicon supply will start to loosen in the middle of September, when the U.S. market awaits for the preliminary decision by the U.S. International Commission (ITC) on Suniva’s petition. However, some polysilicon suppliers have plant maintenance tasks scheduled into the third quarter.
Therefore, the overall available polysilicon stock will still be quite limited. EnergyTrend anticipates polysilicon prices to drop again in September, but the average spot price in China is not expected to go under RMB 135 per kilogram.
“This drastic decrease in polysilicon supply is just too great and will have an impact across the PV supply chain,” said EnergyTrend analyst Jason Tsai.
Tsai added, “a large portion of the current polysilicon demand that was arranged earlier by the downstream markets will not be met even if polysilicon supplier have released their emergency reserves and buyers scoured the market. Spot prices of multi-Si wafers have also jumped since the shortage of polysilicon limited their supply.”
Furthermore, PV cell suppliers based in Taiwan or have factories in third-party countries are now dealing with an influx of orders, as August is the peak demand period in the U.S. and Europe.
To keep up shipments, they will have to bear the polysilicon cost increase that the wafer suppliers have passed on to them in the form higher wafer prices. Small-and medium-size PV cell suppliers in China do not have a lot of orders from foreign markets, so they can lower their capacity utilization rates to moderate the effect of rising polysilicon cost.
On the whole, the upstream sections of the PV supply chain are beginning to reap a greater share of the profit margin.
On the demand side, U.S. solar companies have pulled PV module orders ahead so that products will enter the U.S. before the ITC announces its preliminary ruling on Suniva’s petition on September 22.
Both module exporters and importers want to minimize the risk of paying cash deposits for duties that may be imposed following the September ruling. Thus, module shipments by sea must leave their departing ports no later than in the latter half of August.
With most deliveries made before September, the effect of Suniva’s petition on the demand across the supply chain will be less significant. Hence, there is a strong chance that demand and prices along the multi-Si product chain will start to fall during September.
Prices and demand for mono-Si products on the other hand will be driven by China’s Top Runner Program in the same period. Since the grid-connection deadline for solar projects under the Top Runner Program is September 30, the mono-Si demand is expected to peak in the near term on account of the installation rush.
Polysilicon prices will be supported by the tight supply and the demand from the mono-Si market.
