L R AS Published on Sunday 30 August 2020 - n° 329 - Categories:fundamentals, fundamentals PV
An update on the silicon sector
Electricity accounts for more than 30% of silicon production costs.. This has pushed the producers
to install their capacity in western China where the price of electricity can be as low as 0.26 RMB/kWh ($0.033/kWh). Production units have multiplied. China is now home to 85% of the world's polysilicon production capacity, as many competitors have disappeared :
In 2019, some Chinese silicon manufacturers (Orisi Silicon, Hoshine Silicon, Dunan, Combo and Jingyang) withdrew from the market because their manufacturing costs were too high. Other producers specialising in multicrystalline cannot switch to monosilicon (there are now only a few multicrystalline producers working with low profit margins).
In early 2020, the Chinese Ministry of Commerce stated that China will maintain anti-dumping and countervailing duties on imports of solar-grade silicon from the US and South Korea. This means that imports from the United States will decrease compared to previous years. Tariffs on silicon imports from Korea are much lower than those from the US, but Korean manufacturers have lost their competitive edge in China by incurring higher production costs. Falling silicon prices are forcing them to shut down their operations.
Some foreign manufacturers (Elkem, Hanwha Chemical and the OIC plants in South Korea) have stopped production. The German company Wacker has reduced its production.
In China itself, production on the old lines of large manufacturers is gradually becoming too expensive. It is likely that they will reduce or suspend their activities on these lines, whether at TBEA, Yongxiang Leshan and GCL Jiangsu.
Conversely, TBEA and Daqo New Energy each commissioned new capacity between July 2019 and June 2020. These new units have a production cost of 35 to 40 RMB / kg before tax. This is 40 to 50% cheaper than foreign products.
World polysilicon production capacity was 543,000 tonnes in the second quarter of 2010.. It will increase by 5% to reach 571,000 tonnes in the fourth quarter. The additions will come mainly from GCL Xinjiang and East Hope, which are increasing their activity with new production lines at the end of the year. Currently, Tier 1 producers such as Yongxiang, Daqo New Energy, TBEA and East Hope have 52.7% of the world's polysilicon capacity. Their production costs are less than 45 RMB/kg.
This has made China little dependent on imports.
At present, monocrystalline products represent more than 80 % of the market (and therefore 20 % for multicrystalline), with the objective for the large manufacturers to increase this market share to 95 %.
https://www.pv-magazine.com/2020/08/20/consolidation-continues-for-polysilicon-makers/
PV Magazine of 20 August
