L R AS Published on Sunday 13 September 2020 - n° 331 - Categories:China, silicon mono/multi
The characteristics of the silicon market (1st part): a general increase in costs
The silicon supply problems of July-August are having an impact on the demand for panels and especially on developers. Rising prices can make projects loss-making
(the price of silicon has risen by 49% over the low point of the pandemic period). However, the price of silicon is expected to remain high for six months. A sustainable price of $10/kg would be unsustainable for the industry, which has adapted to low-cost panels.
The price increase seems temporary. It follows an explosion and a flood. It should be remembered that the production of GCL Poly had already decreased. During the summer there were also maintenance operations by other producers. Nevertheless, elsewhere, production site closures are multiplying. South Korea's OCI shut down two production units in February. Only 6,500 tonnes of the initial 52,000 tonnes of capacity remain in service. In February, Hanwha Solutions stopped production. In the United States, REC stopped production, Wacker suffered a fire and is targeting semiconductors. Hemlock withdrew from a new plant.
For the time being, it is estimated that no suppliers are expected to experience supply shortages. On the other hand, high prices are possible. Faced with this, buyers may defer their purchases or pass on their costs to facility owners.
Even without these exceptional situations, the price of silicon and panels would have started to recover, as both had reached a low point during the health crisis and because plant closures had occurred.
Other products needed for photovoltaics are also on the rise: glass, because the two panes of glass that surround the panels are doubling demand. Aluminium prices for panel frames are recovering. Silver paste is being hit by silver prices, which have more than doubled since their recent March low to over $27 an ounce. Supplies of EVA/POE are currently tight as suppliers seek to source components compatible with large panel sizes.
These increases are supported by the strong demand expected in the Chinese market in the second half of the year, by the general price increase after the health crisis, as demand is now recovering, and by the increase in the size of wafers and cells.
With these price increases and the health crisis, the 2020 global installations should remain very close to those of 2019. 2021 should be a brighter year.
https://www.pv-tech.org/guest-blog/how-long-can-these-polysilicon-price-spikes-go-on
PV Tech of September 9
