Since the beginning of this year, the global photovoltaic industry has seen a sharp rise in its prosperity, and it has finally passed on from terminal demand to upstream raw materials.
Polysilicon spot prices have been weak since the 2008 financial crisis, but since the end of July this year, polysilicon spot prices have risen for the first time in nearly two years, and prices have risen by 20% from the beginning of the year in just one month. Affected by this, stocks such as Jiangsu Sunshine, CSG A, Leshan Power, and Tianwei Baochang on the A-share market have also recently risen.
The industry believes that if there is no subsequent overseas market bad news, then the rise in the spot price of polysilicon is expected to continue until the end of this year. improve.
Spot prices soared by 20% in the most recent January
The concept of polysilicon, which was chased by the capital market in 2007, fell to the altar in 2008. Under the impact of the financial crisis, the polysilicon spot market price fell from a high of 400 US dollars/kg to less than 100 US dollars/kg in half a year, and the industrial profits no longer existed.
However, the polysilicon spot market price, which has been oscillating for around 400,000 yuan per ton for a long time, has broken the stalemate that lasted for more than a year in the last month. The data observed by Everbright Securities analyst Wang Haisheng shows that in the two weeks after July 22, the polysilicon price in the domestic market has increased from RMB 400,000 to RMB 415,000 per ton at the beginning of the year to RMB 440,000 to RMB 460,000. The increase is about 10%.
This trend has accelerated in the second half of the year. Yesterday (August 27th) An Taike analyst Xie Chen said that this week's polysilicon manufacturers said that the current domestic spot price has exceeded 500,000 yuan / ton, the mainstream quoted at 48.5 to 50.5 yuan / ton, compared to the end of July rose more than 20 %. Antaike is a market research company directly subordinate to the Research Institute of Non-ferrous Metals Technology. It is one of the authoritative research institutions in the domestic non-ferrous metal industry.
In the eyes of the industry, this time polysilicon prices are expected to be among the expected surge in downstream demand caused by the entire photovoltaic industry supply, and finally conducted by the downstream batteries, components to the upstream polysilicon.
Xie Chen said that Germany announced that it would cut subsidies twice in the third quarter of this year and early next year, stimulating system installers to “prepare†before the subsidy adjustment deadline. As a result, Germany’s installed capacity surged from the end of last year; after the financial crisis ended, The recovery of the economies of various countries and the increase in investment in emerging markets have also contributed to the warming of the global PV market.
Falling to polysilicon, in addition to the recovery of downstream demand, the unique market supply and demand pattern is also one of the reasons for the recent skyrocketing prices. Xie Chen told reporters that the feedback from domestic polysilicon manufacturers is that since the supply of the industry is dominated by long orders and there are few stocks outside, once the downstream demand surges in the short term, it is easy to make the spot price enter a fast rising channel.
Everbright Securities analyst Wang Haisheng also holds the same view, considering that this wave of rising industry expectations that the price of silicon will be boosted.
However, the surge in downstream demand is the biggest contributor to the rise in spot prices. The global photovoltaic industry suddenly recovered this year. Statistics from the industry survey agency IMS Research showed that global PV module shipments were around 7GW in the first half of this year. In 2008, the global installed PV installation capacity was only 5.8GW, and in 2009 it only reached 7.4GW. Earlier, China Investment Research Fellow Jiang Qian once told reporters that in terms of profitability indicators such as shipment volume, installation volume, and corporate gross profit margin, they have hit a peak since the development of the industry in the first half of this year.
Rising prices are expected to continue until the end of the year
The question now is: When will the rise in polysilicon spot prices last?
Judging at least from the latest situation, Germany, which holds 50 percent of the installed capacity in the global PV market, has not felt the impact since domestic subsidies were cut in July. According to news from the website of Leshan City Government, as one of the polysilicon industry bases in China, the city’s polysilicon production reached 2,444 tons in the first seven months of this year, an increase of 190% year-on-year.
The latest monthly customs data reflect the industry more intuitively. According to customs statistics, China imported 3,682 tons of polysilicon in July, an increase of 34.1% compared with the same period of last year. Compared with the 3,784 tons in June, the figure shows that the market share of PV is not decreasing, and the domestic demand for raw materials for component factories is still high. According to a single month, except February, which was 26.47 million tons in the first five months of this year, the import volume in the other four months was about 3,200 tons. In the previous July, China imported 23,000 tons of polysilicon, which exceeded the level of the previous year.
According to industry sources, the global PV market will not have much problem this year. In Italy, another major installation country in Europe, its existing photovoltaic incentives will expire at the end of this year. It has been reported that the government will follow Germany's new incentive plan to lower subsidies, and the reduction will even exceed Germany. It is expected that Germany will transfer its subsidy effect to the Italian market after the subsidy is lowered again in October this year. IMSResearch said that in the first half of this year, global shipments of photovoltaic modules have reached 7GW, and it is expected that annual shipments will grow to a record high of 15.6 GW.
From the reporter's understanding of the situation, the industry researcher conservatively estimates that polysilicon spot prices will continue until October this year, optimistic to see the end of this year. For example, Wang Haisheng and Xie Chen believe that in the absence of bad news in the market, the price of polysilicon will not drop significantly. This wave of price increases will continue until December.
The voice from leading manufacturers may make investors more at ease. Peng Xiaofeng, chairman of LDK, the largest polycrystalline silicon wafer company in China, said on August 25th that the polysilicon supply and demand gap is about 20%. If the demand for photovoltaics continues at a high level, the polysilicon price is expected to break through to 680,000 yuan/ton during the year. That is to say back above 100 US dollars/kg.
For A shares, the expectations of related listed companies are also more optimistic. Jiangsu Sunshine's polysilicon production line with a 1,500-ton phase in Shizuishan, Ningxia, signed a supply contract of 1,000 tons to 1200 tons with Zhejiang Hairun as early as July 2008, but was unable to implement it due to the financial crisis. The reporter called on August 27th. The company, knowing that the contract has been reopened, has not received orders from other companies. The semi-annual report shows that in the first half of the year, Jiangsu Solar suffered a loss in its polysilicon business. However, the company stated that due to the establishment of the trend of rising prices in the industry, the business will be able to turn around during the year.
KGI believes that as the PV market continues to prosper in the second half of the year, A-share polysilicon manufacturers will see a wave of compensatory growth. In addition, Wang Haisheng also said that the profitability of relevant companies will rebound.
The outlook for the next year is still not clear
However, the price increase is expected to be until the end of this year. What is the situation in 2011? The industry is still not clear. However, the latest news shows that after the implementation of the new subsidy policy in July, demand for photovoltaics from the German market declined sharply.
The global PV market structure has shown new trends after July. European countries outside of Germany, such as Italy, France, and Asia, North America, and other emerging markets, grabbed cargo in Germany in the first half of this year and grabbed Germany’s installation capacity, and some of them, such as Italy, may face subsidies in the second half of this year. Yearly cuts, so aggressively rushed to install, so that the global market demand continues to thrive after July 1st - China's Taiwan PV manufacturers recently received orders, mostly from outside Germany.
However, the industry continues to be “hot,†but the prices of photovoltaic modules have also remained high. Therefore, after the first cut of subsidies on July 1, the return on investment of the German PV system was much lower than earlier expectations. Many people in the country have entered a wait-and-see attitude. The German media commented that the market in the country had been “frozen†since July and the demand remained weak in the third quarter.
Last year's installed capacity in Germany accounted for half of the global incremental market; IMS Research data showed that 82% of PV modules were installed in Europe in the first half of this year, among which Germany, Italy and Spain were the main components. Germany will cut subsidies again on January 1 next year, so Xie Chen said that it is difficult to determine whether the PV market can continue this year's market next year. “After all, the emerging market demand is not enough to compete with the German market.â€
IMS Research’s expectations are even more pessimistic. The company believes that in 2011 the European market will have a number of subsidies on the reduction of on-grid tariffs. The industry's response is not yet predictable. However, the consensus in the current market is that PV demand will appear similar to the unhealthy decline in the Spanish market in 2009. Spain surpassed Germany with 2.5GW of new installations in 2008, becoming the largest incremental market in the world. However, after entering the year of 2009, the Spanish government suddenly limited the installed capacity of that year to 500 MW. As a result, the actual installed capacity of the country dropped to a tragic 69 MW last year.
In addition, another major challenge to our country’s enterprises is also emerging. Due to the rapid demand and recession, German-made photovoltaic cells, which have been priced higher than Asian-made solar cells, have recently been reduced by 3% to 5%. Zhou Tao, an analyst at Great Wall Securities, said that taking into account the exchange rate, the German manufacturers' quotation has been comparable to that of China's component companies, and the disappearance of the competitive advantage will not be conducive to the export of domestic PV products in the second half of the year.
In addition, the “surplus†of worries that once sparked industry debate in 2008 is now reemerging. According to statistics of China Non-Ferrous Metals Industry Association’s Silicon Branch, China’s domestic polysilicon production in the first half of this year was 20,000 tons, an increase of 166% year-on-year; and as the projects under construction are gradually put into operation in the second half of the year, the supply of polysilicon market will gradually increase, so it is expected that Polysilicon prices will gradually stabilize in the first half of next year and fall slightly again.