Polysilicon industry encounters "Waterloo"

The new energy industry, which has always been sought after in the capital market, is experiencing unexpected changes. As of March 26, 39 listed companies in the new energy sector of the Shanghai and Shenzhen Stock Exchanges have announced their annual reports. The total net profit was 10.97 billion yuan, a decrease of 9% from the previous year, and some companies even experienced a 90% drop in performance. Polysilicon, Wind power and other new energy industries encountered "Waterloo".

Deng Shicun, a securities analyst at Dongxing Securities Sanming Sales Department, said that in the past few years, polysilicon in the domestic photovoltaic industry has relied heavily on exports, and since last year, the demand for solar energy products has decreased in major European and American consumer countries. The reason is that the US "double anti-dumping" (anti-dumping, countervailing) investigation and the impact of the European debt crisis have appeared. As a result, sales prices of crystalline silicon solar cells and module products plummeted, and profits have shrunk dramatically. In China, the production capacity of polysilicon production companies in the past few years has been gradually released or newly launched. Production capacity has been gradually released, and production has continued to increase, causing excess production capacity, which is also the reason for the rapid decline in prices.

The reporter learned from the China Non-Ferrous Metals Industry Association’s Silicon Branch that the price of polysilicon has risen to a peak price of about US$500,000 per ton for the first time, but since the second half of 2008, the price of polysilicon has turned down, accelerated in 2011, and has now fallen below 3 Million US dollars / ton. Suppressed by end-user demand, domestic polysilicon prices have also dropped back to 190,000 to 200,000 yuan/ton. The entire industry has experienced a serious inventory backlog. Nearly 80% of PV companies have stopped production, and the industry is undergoing severe development.

Reporters learned that the Department of Industrial Coordination of the National Development and Reform Commission recently organized a special seminar on polysilicon industry. The meeting revealed that several domestic polysilicon manufacturers have reduced their guaranteed price shipments, and foreign companies such as the United States and South Korea have also dumped prices, which is the main reason for the overall decline in polysilicon prices. As the global supply of photovoltaic products is still in a temporary surplus stage, it is difficult to predict when the price of polysilicon will actually rebound.

More people in the industry stated that with the preliminary results of the US Department of Commerce’s announcement in March of countervailing investigations on China's photovoltaic products, the prospects of China's photovoltaic industry are even more confusing. If this ruling is finally approved, it will certainly make the entire industry worse.

In response to this situation, the China Non-ferrous Metals Industry Association's Silicon Branch is working with industry companies to collect relevant data and conduct polysilicon industry investigations and evidence collections that are subject to low-cost dumping damage by US and South Korean companies. The Department of Industrial Coordination of the National Development and Reform Commission requires that polysilicon enterprises should increase technological innovation and research and development efforts, reduce energy consumption, improve product quality, promote joint reorganization of enterprises, and strengthen industry self-discipline.

According to the “Twelfth Five-year Development Plan for Solar Photovoltaic Industry” released recently by the Ministry of Industry and Information Technology, China will actively cultivate diversified markets, promote the healthy development of the photovoltaic industry, and support the establishment of a number of distributed photovoltaic power stations and off-grid applications. Photovoltaic building integration BIPV system encourages the construction and application of large photovoltaic grid-connected power stations. It can be foreseen that once the domestic market is activated, it will be able to drive the development of the upstream and downstream photovoltaic industry chain, so that the polysilicon industry out of the trough.