Solar grade polysilicon prices crash amid global supply glut.
Spot prices for the main ingredient in photovoltaic panels are crashing considerably and fast, fueled by a glut in China’s photovoltaic panel supply chain. Some companies manufacturing polysilicon make PV panels at a loss, while others have shuttered production.
Bloomberg data shows the average price of PV silicon plunged 22% from last week to $9.6 per kilogram, hitting levels not seen since the summer of 2020. Prices peaked on June 2022 at $39 and have since plunged 75.5%.
The main reason for the plunge is “polysilicon production far exceeds expected global installation,” according to BloombergNEF.
Data from PV Infolink shows silicon prices fell even lower, to as low as $7.5 per kilogram. Some manufacturers are dumping polysilicon on the market to shed inventory amid a worsening glut.
Some manufacturers, such as Daqo New Energy Corp., need $7.55 per kilogram to break even. Bloomberg quoted China Silicon Industry Association, who said, “Several factories have suspended production to avoid selling at a loss.”
Citigroup wrote in a note to clients that polysilicon prices are near the industry’s average production cost after a year of declines, adding the price correction is due to increasing new capacity by most of the world’s top producers.
Citigroup analyst Pierre Lau noted that wafer, cell, and module market prices also declined, through the lower polysilicon costs, while solar glass prices were flat.
He pointed out three polysilicon producers have suspended production due to low prices, and the timeline to restart still needs to be clarified.
BloombergNEF expects polysilicon prices to stabilize in 3Q as production shutdowns will help alleviate supply.
Source: Bloomberg
