Wacker, unnamed solar company cancel supply contract

The shifting sands of polysilicon supply within the solar sector have delivered a short-term windfall to Wacker Chemie, worth some $89 million. Wacker and an unnamed solar company have cancelled a supply agreement, with the German company pocketing both pre-payments and a compensatory sum.

Wacker advises that the windfall will boost its Q2 2015 revenues, in the form of special income, but has not provided any further details as to the development.

Long term polysilicon supply contracts have become less common in the PV industry in recent years. IHS analyst Ray Lian told pv magazine that while in the past as much as 80% of polysilicon supply contracts in the solar sector were long term, increasingly ingot and wafer producers are turning to the spot market.

“The share of long term contracts has been decreasing because the spot price kept decreasing so the share of long term contracts is much, much less now,” said Lian. “It should be below 50% of total volume [in 2015].”

IHS’ Lian notes that Wacker has retained a reputation for being a high quality supplier and as such has maintained good market share with some higher efficiency producers. The German company has been affected by tariffs on polysilicon imports into China, however Wacker did manage to broker a minimum price deal, allowing it continue to supply Chinese manufacturers.

Wacker operates polysilicon production sites in Nünchritz and Burghausen. It is also developing a 20,000t production facility in Tennesse.