Thread Content
In 2008, the most pressing issue in the solar industry was the shortage of polysilicon. This not only highlighted the strong demand in the market but also encouraged many newcomers eager to reap high profits to enter the solar photovoltaic sector. Polysilicon is an industry with high technical and capital barriers, and price surges caused by shortages led to a boom in investments in polysilicon plants before 2008; some of these plans were also part of vertical integration efforts by solar panel manufacturers aimed at securing supply of upstream raw materials. Looking at the polysilicon raw material market in 2009, new production capacities were continuously added by major raw material producers, and new polysilicon manufacturers began to engage in trial production, thus contributing additional supply to the market. Additionally, the global economic downturn led to a sharp drop in demand for semiconductors; as a result, a large amount of polysilicon intended for semiconductor use flowed into the solar industry, where profits were higher, and this became the main source of increased polysilicon supply in 2009. From the demand side, the overall solar photovoltaic market also experienced significant changes in 2009. In addition to adjustments in certain **solar subsidy programs, the disorder in financial markets meant that solar projects, which relied on bank loans, lost their financial support. This led to delays or obstacles in meeting strong end-demand due to issues with bank loans. Moreover, poor weather conditions around the world during the first quarter of 2009 reduced the installation of solar systems, further complicating the demand situation in the solar photovoltaic industry that year. In terms of prices, the spot price of polysilicon reached a new high since 2008 before starting to decline; it dropped sharply in the fourth quarter of 2008, and this downward trend has continued. As the polysilicon market rapidly shifted from a seller’s market to a buyer’s market, major raw material suppliers offered flexible adjustments to long-term contract clients in order to maintain strong customer relationships. Additionally, many of the high-priced raw material contracts signed in 2008 are likely to need to be renegotiated. However, given the weak market demand in the first quarter of 2009, why did the price of polysilicon remain above $100 per kilogram? What is the supply structure of polysilicon raw materials? Many factors influence the price trend of polysilicon, and these factors are also key topics worthy of discussion. The financial crisis has affected many new polysilicon projects; the capital-raising and expansion plans of these new polysilicon companies will face severe challenges, with issues such as shutdowns and delays in project progress becoming more apparent. Yet many companies that have already invested continue to proceed as planned. These new entrants will put pressure on a market characterized by an oversupply of raw materials, and their production volumes and product quality will be key areas of focus. A reshuffling within the polysilicon industry is gradually coming to light.