Global polysilicon net demand, which includes that of the semiconductor industry but excludes the consumption of inventories, will be approximately 250,000 metric tons this year. The spot price, according to the market research company, is predicted to rebound to a level of US$20 to US$25 per kilogram by the end of this year.
The photovoltaic industry makes up about 90% of total polysilicon demand and polysilicon manufacturers will profit from the slightly accelerating growth of this sector. "The global PV market will pick up speed albeit at a slower pace than we originally assumed," said Johannes Bernreuter, head of Bernreuter Research and author of the global polysilicon market report The 2012 Who’s Who of Solar Silicon Production. "We now expect new PV installations to reach 35 to 37 gigawatts (GW) in 2013. China, Japan and the USA will replace Germany and Italy as the PV growth locomotives."
Overcapacities and a 25,000 MT inventory scenario plagued the polysilicon industry in 2012 due to the production surplus the year before. The average rate for high-purity polysilicon decreased by 47% to a record low of $15.35/kg in 2012 after the plunge of 59% in 2011.
Bernreuter Research states that since September 2011 the severe price decay has forced about 50 polysilicon manufacturers, mostly small and medium enterprises in China, to abandon or suspend production. In Q3 2012 all top producers reduced the utilization rates of their plants, succumbing to price pressure. According to preliminary estimates of Bernreuter Research, the global polysilicon production volume consequently fell to approximately 235,000 MT in 2012, a drop of almost 8% from the output of 255,000 MT in 2011.
"Along with the large inventories and the supply of thin-film modules, those 235,000 MT were nonetheless sufficient for a newly installed PV capacity of 33 to 34 GW worldwide in 2012," said analyst Bernreuter. However, the latest shipment guidance of 13 major public solar module manufacturers points to new installations of only 30 to 31 GW. "The actual result could still be somewhat higher for two reasons: thanks to a better fourth quarter, several of these manufacturers may have exceeded their guidance, and other producers have possibly gained additional market share," explains Bernreuter. "If the markets in China and the US had a strong finish, 31 to 32 GW are possible."
Upward price drive
The spot prices are expected to be driven upwards in the first quarter thanks to the installation rally in Japan ahead of possible FIT cuts in April, the demand for PV systems in China and the punitive duties on polysilicon imports to China expected in February. Even if China should impose duty tariffs as high as 50%, as is rumored, Bernreuter Research does not expect a strong revival of the Chinese polysilicon industry. "The manufacturing costs of most producers are still too high and the quality of their product is too low," said Bernreuter. "We assume a lot of foreign polysilicon shipments for Chinese customers will be diverted to wafer manufacturers in Taiwan and then imported as wafers or solar cells to mainland China."
More details on the polysilicon, semiconductor and PV markets are provided in the current report of Bernreuter Research, The 2012 Who’s Who of Solar Silicon Production.