This week, the prices of polysilicon have returned to the upward trend with around 2% increase for polysilicon recharging, polysilicon prime for mono, and polysilicon prime for multi, according to the price updates released by the Silicon Branch of China Nonferrous Metals Industry Association (CMRA).
The major reason behind, according to the Silicon Branch, is the demand-supply imbalance.
Driven by the relatively high profit margin, wafer manufacturers have maintained high operating rates, which translates into their strong demand for polysilicon.
Despite the fact that polysilicon manufacturers are almost running at full capacity and gradually ramping up their production, the supply still falls short of the demand.
The production plans of polysilicon and wafer makers in June show that the total amount of polysilicon supply is around 70,000 MT, domestically made and imported included. Although it’s 4% higher than the previous month, the amount of production capacity added could still be below expectation. It is because some enterprises are falling behind schedule to reach their design capacity.
Overseas polysilicon manufacturers won't be of too much help in this situation. Although OCI in Malaysia has resumed production, it cannot operate at full capacity in June yet. Imports from Germany’s Wacker are likely to remain low due to transportation problems.
However, the demand is tremendous. The National Energy Administration (NEA) of China predicted that 108 gigawatts of solar will be connected to the grid in 2022, up 96% compared to last year. Global installations could then reach 250 GW, demanding around 910,000 MT of polysilicon.
The total supply of polysilicon, however, could only be around 880,000 MT, calculated based on the production plans of major manufacturers. The supply still cannot satisfy the demand.
Therefore, before the profit margin narrows down for wafer makers, polysilicon will remain in high demand. The shortage of the source material is unlikely to ease in the short term, so the prices may continue to go up.
Solarbe noticed that the prices of polysilicon have risen by over 10,000 RMB/MT since the end of April. The costs have mounted significantly throughout the solar value chain. Wafers, cells and module manufacturers are likely to increase their prices in response to the price spike.