‘New surge in downstream demand has driven the polysilicon shortage to a crisis point’

The shortage and the rising prices of polysilicon are currently forcing solar panel suppliers to slow down production, according to the global vice president of Chinese solar manufacturer JinkoSolar, Dany Qian.

“There is a storm of supply and demand factors going on here,” he said in a statement to pv magazine. “But basically, there is a new level of capacity demand that can’t be kept up with, everyone is facing the brunt of this crisis situation.” The most affected by the supply glut are the Tier 2 module manufacturers, as they found themselves at the back of the queue when a first rebound materialized after the market contraction by the outbreak of the Covid-19 crisis, he added.

Qian further explained that, initially, the problem was only a temporary delay in supplies as factories had to shut down when the coronavirus pandemic first hit. “Although the production is back to normal now, the new surge in downstream demand has driven the polysilicon shortage to a crisis point,” he stated. Tier 1 panel makers, instead, will be the first choice for polysilicon suppliers and will always get preference in the pecking order, irrespective of market conditions, due to their scale and purchasing power, according Qian.

The company's analysts are convinced that the polysilicon shortage will continue “for a while,” as there are no signs of its supply catching up anytime soon, with consequences on the whole PV supply chain. Furthermore, it is expected that silver and copper will also see upward price trends. According to the company's projections, polysilicon prices are not expected to decline in the next six-month time frame and the upward trend may stay for “even longer.”

Citing a recent report from the Taiwanese market research company EnergyTrend,  the manufacturer said that the latest polysilicon price was around RMB 135 ($20.8)/kg, which was 3.31% higher compared to the previous month, and that a further price increase to RMB 150/kg was likely to be reported very soon.

Referring to the Indian market, Daniel Liu, Jinko's general manager for South & Central Asia, said that Jinko had not backed out from any of the signed deals with its Indian customers due to the raw material supply shortage and the rising prices, as reported by unspecified false reports. “There will be an overlap, with demand peaking during Q4 in India too because of the BCD [basic customs duty] announcement from next year forcing developers to secure shipments by March 2022,” he stated. “This will further leave little or no room for price drops, but we are well equipped to face this challenge.”