Polysilicon shortage in China drives 35% price spike, Bloomberg reports

Share

A shortage of polysilicon in China has triggered a 35% price spike, as the cost per kilogram rose from $14 to $19 over the past four months, causing difficulties for solar manufacturers who have already reported a marked decline in profit.

According to Bloomberg, the massive rise in price comes as a combination of factors such as an annual slowdown in polysilicon output, which refiners in China use for routine maintenance, this time coupled with China’s Ministry of Environmental Protection’s decision to shut down several plants that make metallurgical silicon, which is further purified by other companies to be used in solar cells.

While the costs of solar continue to fall rapidly across the globe, setting the stage for record-breaking installation figures, China is leading the way with solar PV capacity additions that have far exceed expectations, as more than 50 GW of PV is likely to be installed before the year is out. But, for the country’s upstream manufacturing sector, it is not all roses, as its exposure to the polysilicon price spike has resulted in a margin squeeze.

So far, Canadian Solar, Hanwha Q Cells and JA Solar have reported reduced profits, whereas the financials of JinkoSolar are still to be released. As reported by Bloomberg, third-quarter net income at Hanwha fell 88% from a year earlier to $5 million, which the company attributed to downward pressure on gross margin, caused primarily by increasing wafer prices. Emerging as a winner, however, is GCL-Poly, China’s largest supplier of the material, which climbed to an almost two-year high in Hong Kong trading this week, as its shares have gained more than 80% since the start of the third-quarter.

The story of China’s polysilicon shortage goes back to the imposition of steep anti-dumping tariffs on the European Union, the United States and South Korea four years ago, which has made it difficult for Chinese manufacturers to circumvent the local market and look elsewhere for cheaper polysilicon.

According to Bloomberg New Energy Finance index of average global spot prices, polysilicon climbed to $15.80 a kilogram in October, the highest since July 2016.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Popular content

Solid-state batteries enter pilot production, costs expected to drastically drop
01 November 2024 The latest findings from Taipei-based intelligence provider TrendForce show that all-solid-state battery production volumes could have GWh levels by 2...