16 January 2019

A 2Q test for China polysilicon as solar flares

The photovoltaic industry is warming up and solar cell material makers are putting it to the test. They’re asking for higher prices for factory supplies, knowing there’s a lot of reasons to support a brighter outlook.

China aims to install 12 gigawatts of solar power this year, up from 9 GWs last year. Renewed waves of investment in solar power stations mean bigger demand for cells and modules — and the polysilicon used to make them.

China’s anti-dumping measures against US and South Korean imports are also going to shift demand to domestic suppliers.

The central government has already called on the country to prop up the photovoltaic industry, and the regional authorities have responded with complementary plans. Fujian is the latest to list tax subsidies for the sector, particularly for on-site projects on housing estates, in industrial parks and in street lighting.

But the supply side is responding to these favorable factors too.

The solar recession forced many factories to stop production; at one point only six out of 43 major lines were still operating. But by the end of last year, that number had doubled to 13, according to the China Securities Journal.

The second quarter will be a testing time as output from restarted lines hits the market.

Rival imports are not to be ignored either. Through processing arrangements with factories outside the anti-dumping penalty list, foreign makers can still work around the rules and continue to compete for orders.

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EJ Insight writer

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