Polysilicon cost control will become the key

It is difficult to reverse the market supply and demand in the short term so that manufacturers in the photovoltaic industry also face different dilemmas. Silicon wafers and component suppliers that are in the middle and lower reaches of the industry are the first to go. Up to now, most companies have begun to face sustained losses in the second quarter. Some SMEs have already cut production or even stopped production.

According to the statistics of the relevant securities firms, in the first half of this year, the average gross margin of the domestic PV industry declined. Among them, the gross profit of solar cells and modules decreased by 5 percentage points year-on-year, and the gross profit of polysilicon and industrial chain integrated companies decreased by 0.8 percentage points. In the United States, Suntech, JA Solar, Zhongdian Solar, LDK Solar and other photovoltaic companies all suffered losses in the second quarter.

Since the third quarter, the battery components have continued to decline. For most enterprises, it is difficult to have room for survival. The company’s losses have become increasingly serious. Although many PV manufacturers are still trying to lose money in order to ensure the flow of funds, but if such a As the market continues, nearly half of the companies will face the fate of being forced to stop production. Currently, many professional organizations including Solarbuzz believe that the average price of solar cells and modules at the end of the year will fall by about 15%-20% from September, when the global photovoltaic industry is likely to face a new round of reshuffle.

It is worth noting that, at the same time, photovoltaic giants such as Wuxi Suntech, Changzhou Tianhe, and Suzhou Ates have faced the option of long-term contract losses and sustained losses because they previously signed higher-priced long-term contracts with upstream manufacturers.

“Because of the large fluctuations in polysilicon prices before this, downstream large-scale plants generally adopt the method of signing long-term orders and locking in costs in order to avoid the risk of rising raw materials. But the precondition is definitely to be able to make money,” said a large-scale polysilicon company in Sichuan. At present, some large plants are contracts signed in 2008. The length of the contracts reached 10 years, and the short ones are 5 years. The agreed prices are generally higher than the current spot prices.

On July 1, Wuxi Suntech announced that it had terminated the 10-year cooperation agreement with MEMC and paid a huge compensation of US$212 million. It is said that after the termination of the contract, Suntech will no longer need to purchase approximately 4.6 GW of wafers between 2011 and 2016 according to the contract, and it is estimated that it will be able to save about 400 million U.S. dollars for Suntech Power in the next five years.

For polysilicon manufacturers at the front end of the industry, the prices of mid-and-downstream companies will inevitably face downward pressure due to the pressure of price and cost upside down. At the same time, the sustained release of domestic polysilicon production capacity in 2011 and the low price competition of foreign polysilicon also made it necessary to devote more efforts to unit cost control.

On September 14, Leshan Power, a listed company of polysilicon taps, announced that it will join forces with Tianwei Baochang to increase the investment of 382 million yuan in the company's subsidiary, Ledian Tianwei, to help the company implement a single polysilicon with an annual capacity of 3,000 tons. Cold-hydrogenation of the production line. The project has a total investment of 758 million yuan, and through technological transformation, it will effectively reduce the unit cost of polysilicon.

Cold hydrogenation technology reform is currently one of the effective ways to significantly reduce the cost of polysilicon production. Photovoltaic faucet GCL-Poly has previously undergone technological changes and has continued to reduce the production cost of polysilicon units from US$40 to the current level of US$22, and its competitiveness has suddenly increased. At present, the cost of most domestic polysilicon manufacturers is between 40-50 US dollars, compared with the foreign price of about 25 US dollars, there is no advantage at all.

"Under the current market environment, only polysilicon suppliers that have passed technological transformation can ensure their stable profits. For vertically integrated companies, they can also smooth the profit distribution that drastically decreases the prices of their midstream and downstream products. Competitiveness.” The aforementioned market participants believe that according to the current trend of polysilicon prices, many domestic manufacturers are already on the verge of losses. For a long time, the industry will inevitably be integrated, and 80% of the companies will be eliminated.