SHANGHAI, Nov 3 (SMM) - For a long time, the silicon industry, as an important upstream raw material for the photovoltaic industry, has attracted much attention from the market. In October, the prices of polysilicon came to a price high of nearly a decade, which triggered a heated discussion on silicon and even the PV industry chain.
According to experts, the reason for the current price hike is that the supply and demand imbalance is exacerbated by each sector in the industry chain due to a periodical mismatch of resources. In detail, when the silicon prices are expected to rise, the first-tier manufacturers will actively sign long-term orders to "hoard" silicon to mitigate the risks. And since the PV industry chain is particularly long, the eagerness of stocking raw materials will encompass every sector across the whole industry chian.
For example, silicon wafer manufacturers will purchase more polysilicon raw materials; solar cell manufacturers will purchase more silicon wafers; and some downstream manufacturers even make purchases from more upstream sectors, such as assembly companies to hoard silicon materials and wafers. With every sector in the industry chain "hoarding" goods, the demand will be greatly amplified, resulting in a significant increase in silicon prices.
The global PV installation was only 17.5 GW in 2010, which reached 130.27 GW by 2020, with even greater expectations for the next few years. The capacity of silicon wafers is exaggerated even more, being more than double the actual installed capacity, and silicon wafers are expected to expand capacity even more ambitiously.
Although China's polysilicon capacity production is expanding, foreign production capacity is in stagnation and the output declines. China's polysilicon supply (including imports) has grown from only 91,000 mt by the end of 2010 to nearly 500,000 mt in 2020 million; even if the factors such as the decline in unit consumption are excluded, the supply growth multiplier is still less than the terminal demand expansion rate, not to mention the wafer sector greatly exaggerates the actual installed base, which directly triggers the demand for silicon. This vividly illustrates the reason for supply and demand imbalance across the industry chain today.
The follow-up price performance of silicon will be more influenced by electricity costs and coal prices in the context of energy price reform. As to whether there will be regulation policies, it depends. If the purchase is made based on their own manufacturing capacity and market expectations, with procurement excess actual demand by, for example, 20%, such normal market procurement behaviors and price fluctuations will not be controlled by the government regulators. After all, silicon enterprises also need to pick up good cotton clothes in order to survive the "winter". However, for behaviors like monopoly and malicious hoarding, the government will take serious actions to crack it down.
From a market perspective, the accelerated pace of polysilicon expansion will gradually make up for the previous supply gap and gradually reach a balance, although this process takes time. Generally speaking, it will take at least one and a half to two years for a new product to yield output. And in this process, the possibility of further price hike of silicon as raw materials is not high, so there is also no need to be panic.
From the industry point of view, at present, China's photovoltaic industry chain is enormous in scale, mature in technology and rapidly declining in cost. From the demand side, China will continue to optimize the industrial structure and energy structure, to vigorously develop renewable energy, and to accelerate the planning and construction of large wind power photovoltaic base projects in desert and Gobi desert areas. Thus the industry will maintain a high level of growth.
