Jackie Chang, DIGITIMES [Friday 20 May 2011]
Spot market quotes for polycrystalline silicon (poly-Si) material in China have dropped to US$60/kg, lower than contract prices of US$65-68/kg signed by South Korea-based OCI with most of its clients in Taiwan and China in the first quarter of 2011, according to industry sources.
Negotiations for lower contract price between polysilicon firms and its clients have been taking place due to falling spot price of polysilicon and weak demand in the end market, according to industry source. But it is very unlikely for international suppliers to budge, added industry sources.
Many solar wafer and cell firms signed supply agreements with polysilicon firms to secure long-term steady supply in 2009 before the financial crisis hit. Back then solar wafer and cell firms were facing serious shortages of polysilicon supplies.
The recent downturn of the solar market is causing prices to fall across the supply chain from modules, cells, to wafers. Inventory has been piling up at the downstream. The wave of falling price has reached the spot market of polysilicon. Market obsevers have indicated that spot price in China's polysilicon market has fallen to US$60/kg, comparable to many contract prices.
For the contract price of polysilicon to fall in the second quarter seems impossible, whether or not the price will accommodate wafer and cell firms will depend on the continuous negotiations, industry observers stated.
Polysilicon shipments from South Koea to China and Taiwan increased in 2010 with the contract price quoted at US$60/kg, much lower than the spot price of US$80-90/kg at the time, industry observers stressed. This benefited the China- and Taiwan-based wafer and cell firms to capture large profits in 2010.
Industry leading polysilicon firms include US-based Hemlock, Japan-based Tokuyama, Mitsubishi, Sumitomo, Germany-based Wacker, REC, MEMC, South-Korea based OCI, and China-based LDK.
Wafer and cell firms in Taiwan and China have been signing agreements with South-Korea based OCI. OCI currently made an order of US$228 million of equipment from US-based equipment supplier GT Solar.
Korea-based OCI is a major poly-Si supplier for China- and Taiwan-based solar firms
Photo: Nuying Huang, Digitimes, May 2011
China spot market prices for poly-Si fall to US$60/kg, say Taiwan makers
Photo: Nuying Huang, Digitimes, May 2011
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