Polysilicon prices have been edging up in recent months after a collapse in previous years. Limiting new entrants and phasing out obsolete production lines could help prices recover further in the coming year.
Quoting data from research houses including PVInsights, EnergyTrend and Solarzoom, the China Securities Journal reported that the price of the solar cell material rose by 4 to 7 percent in the past one to two months.
While demand has improved, the supply side has not responded with more output, and some companies have been hoarding polysilicon, adding to the upward price momentum.
Polysilicon is a very capital intensive business. But at current price levels, return won’t be high enough to justify new investments.
Although existing capacity is still large, a significant portion of that capacity can no longer meet current technical standards, nor reach competitive production cost levels, according to the newspaper.
The report cited TBEA (600089.CN) as an example. The polysilicon maker’s facilities are expected to have reached full utilization in recent months.
Amid China’s aggressive promotion of solar power and improving end demand from other markets such as the United States, downstream solar product makers are likely to expand. Against the backdrop of stable supply, polysilicon prices could continue to edge up in 2014.
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