【Haichuan Chemical Salary News】Domestic polysilicon companies achieve technological innovation, boasting the highest cost advantages in the world
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On October 30, the Ministry of Commerce announced that, as of November 1, 2018, the anti-dumping measures and countervailing measures imposed on imported solar polysilicon originating from the EU would be discontinued； The addition of new polysilicon production capacity, along with the cancellation of anti-dumping measures on polysilicon imported from Europe, has led to a significant increase in the supply of polysilicon in China. Han Qiming from Shenwan Electrical Equipment believes that through technological upgrades, the production costs of polysilicon have been continuously reduced, enabling it to meet the price requirements for silicon materials needed to achieve grid parity. The newly expanded production capacity in the domestic market, thanks to its cost advantages and continuous improvements in product quality, will greatly meet the demand for domestic substitution. It is recommended to pay attention to Tongwei Co., Ltd., GCL-Poly Energy, Xinte Energy, and GCL Systematics Energy, which possess cost and scale advantages. ①Demand for polysilicon benefits from rising global photovoltaic installations. Globally, photovoltaic installation volumes are seeing steady growth, driven primarily by emerging economies such as China and India. The compound annual growth rate of global new photovoltaic installations from 2014 to 2017 was 40.2%. Shenwan Hongyuan predicts that the silicon consumption per watt for global polycrystalline silicon wafers will be 3.80 g/W in 2018, 3.56 g/W in 2019, and 3.33 g/W in 2020. Based on this prediction, the total demand for silicon materials from 2018 to 2020 will be approximately 359,300 tons, 403,800 tons, and 456,600 tons respectively.
②Industry leaders are accelerating capacity expansion to gain a cost advantage, while those with lower costs stand out. Due to the higher-than-expected installation volume of photovoltaic systems, leading polysilicon producers have announced plans to expand their production. GCL-Poly (Jiangsu Zhongneng) has put into operation a new production facility with a capacity of 60,000 tons in Xinjiang. Tongwei Co., Ltd. has also established new production facilities with a capacity of 50,000 tons each in Leshan, Sichuan, and Baotou, Inner Mongolia; of this, the 25,000-ton facility in Baotou is already in operation. In a situation where supply exceeds demand, the options of \"low electricity prices + new production capacity\" and \"low electricity prices + existing production capacity\" – which are cost-effective – become the winners in competition; those with no cost advantage, namely \"high electricity prices + existing production capacity\", will eventually withdraw from the market. It is estimated that the total production capacity in 2019 will be around 421,000 tons, sufficient to meet global demand for polysilicon.
③Domestic polysilicon manufacturers have lower costs compared to foreign companies, which is accelerating the process of domestic substitution. At present, the production costs of polysilicon companies in China are significantly lower than those of foreign firms; the production costs at German companies such as Wacker and South Korean company OCI are around 90–100 yuan/kg； In 2017, Tongwei’s production cost was around 56 yuan/kg. It is estimated that the cash cost for the new production facilities in Leshan and Baotou will be 30 yuan/kg, while the production cost will be 40 yuan/kg; the total cost will thus be 50 yuan/kg. In the future, new low-cost production capacity in China will gradually replace foreign production capacities such as those of OCI in South Korea and Wacker in Germany.