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December poly price recovery a false dawn

The global spot price for polysilicon continued to plummet in October and is expected to continue its descent this month, according to the IHS Solar Polysilicon Price Index.

Although IHS is predicting an upturn in December and January, the recovery is likely to prove a false dawn.

Deutsche Solar

IHS’ figures show a fall of more than 9% in the spot price of 9N-grade poly in October with 6N-8N-grade material falling 7%. The contract price of the higher grade material fell around 1% during the month but tumbled more than 8% for lower grade polysilicon.

With shipment volumes declining 14% it was bad news all round and that was not the end of it with IHS senior analyst Glenn Gu stating that although the consultancy is predicting an upturn in December and January, the recovery is likely to prove a false dawn.

"Suppliers are trimming production, inventories in the channel are continuing to be depleted and most industry players are expecting a rebound in demand in 2013. Because of this, spot market pricing for solar polysilicon will uptick slightly at the start of next year," stated GU.

He continued, "Even so, spot prices will remain significantly lower than those on the contract market, causing solar polysilicon suppliers to continue to cut contract prices as they strive to catch up with the spot market. Overall, this indicates that supply will remain in excess of demand, and that pricing will return to a state of decline later in 2013."

IHS is predicting that there will be a rebound of 2.4% in the spot price of grade 6N-8N material in December and January, the first such rise since January 2012. The consultancy is predicting the spot price of higher grade polysilicon will remain flat, which would be the first time in nine months that the market did not see a fall.

Last week, principal photovoltaic analyst at IHS iSuppli Henning Wicht told pv magazine that while the world's biggest polysilicon producers – OCI, Wacker, GCL Poly and HSC – may continue to expand production by offsetting any associated losses against longer-term gains of expanded market share, half of the world's tier 3 suppliers face bankruptcy in the months ahead.