GCL’s upper hand double-edged sword for downstream solar players

TAIWAN: Yesterday marked the beginning of PV Taiwan (Taiwan International Photovoltaic Forum and Exhibition), a three-day long event that will include Motech, GLC, OCT, and other major PV manufacturers sharing their development plans for the future.

First-tier Chinese manufacturer GCL has already revealed their current profit figures, reaffirming their status as an industry leader. Looking towards the future, EnergyTrend, a green energy research division of TrendForce, the PV industry will likely remain in a state of oversupply in 2012. Furthermore, as capacity continues to expand, downward adjustment of polysilicon price is inevitable, but major manufacturers will still have an advantage in terms of price-setting.Source: EnergyTrend, Taiwan.

2012 will be a difficult year for the polysilicon industry. In terms of capacity, GLC and OCI each have a target of 65 thousand tons for Q4, which means that capacity from these two manufacturers alone will meet the 20GW requirement for 2012. As market demand for 2012 is expected to be approximately 20GW, it is clear that the polysilicon industry will face severe oversupply next year. Therefore, EnergyTrend believes that the industry will see a price of $40/kg in Q4, and average price will be less than $40/kg in Q1 of 2012.

According to statistics compiled by EnergyTrend, the lowest polysilicon price quoted at PV Taiwan so far is $35/kg, but few transactions have been concluded at this price. Currently most deals are conducted at prices above $40/kg. However, related manufacturers indicate that as GCL’s performance has been impressive, lowering price to $30/kg should not be a problem. The difficulty will lie in getting upstream manufacturers to agree to such a price. Additionally, as GCL’s Si wafer production cost is lower than $0.2/Watt, their total Si wafer cost is estimated at $1.3/piece and there is a good possibility that they will supply Si wafers at a price of $1.5/piece.

EnergyTrend believes that as GCL will present formidable competition to upstream polysilicon and Si wafer manufacturers, makers already at a disadvantage in terms of capacity and funding will face an even tougher challenge. As for downstream solar cell manufacturers, first-tier makers already cooperating with GCL should benefit, but as for mid and small-sized manufacturers, whether they will be able to enjoy the same prices as first-tier makers depends on the terms that they can offer to GCL.

As for this week’s spot prices, polysilicon, Si wafer, and solar cell price have all fallen. The lowest polysilicon price has come to $35/kg, and ASP has dropped by 4.68 percent to $44.4/kg. As for Si wafers, the lowest prices for multi-Si wafers and mono-Si wafers were $1.48/piece and $2.1/piece, respectively. Average multi-Si wafer price declined by 3.64 percent to $1.748/piece, while average mono-Si wafer price dropped by 2.04 percent to $2.349/piece. Lastly, solar cell ASP also saw a slight decrease of 2.84 percent, arriving at $0.684/Watt.