The market is mild and stabilizes some polysilicon advantages
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In the third quarter, the domestic spot price of polysilicon experienced a moderate upward trend, with supply and demand remaining relatively stable. This positive development has prompted some leading domestic polysilicon companies to gradually resume operations, alleviating the widespread production shutdowns that had plagued the industry for over a year. However, despite this improvement, some analysts still believe that numerous unfavorable factors continue to affect the market. They expect that the industry will not be able to break free from its "frozen" state throughout the year.
According to data from the Silicon Industry Branch of the China Nonferrous Metals Industry Association, the polysilicon price in China rose moderately during the third quarter. At the beginning of July, before the preliminary anti-dumping rulings by the U.S. and South Korea, the spot price was between 105,000 and 135,000 yuan per ton, with an average of around 122,270 yuan per ton. After the announcement on July 18 regarding the production of beauty products, and following South Korea’s imposition of temporary anti-dumping measures on solar-grade polysilicon, prices saw a slight increase, reaching 134,000 yuan per ton by the end of September—a rise of 9.2%.
As the "double reverse" ruling progressed, many domestic polysilicon companies were encouraged to restart their operations. According to the same industry association, by the end of the third quarter, 10 companies had announced the resumption of production, including A-share listed firms such as TBEA and CSG A.
Among them, several enterprises resumed operations during the quarter: Luoyang Zhongsi achieved full recovery on August 18; Yichang CSG A's polysilicon plant, which had been offline for 11 months for maintenance and upgrades, officially resumed operations on August 4; and Shaanxi Tianhong restarted production in September after completing shutdowns and staff training at the end of 2012.
TBEA’s 12,000-ton polysilicon project is now operating stably, with full production expected by the end of 2013. To date, the single-line equipment has been commissioned, producing 400 tons of high-quality polysilicon. According to statistics, the production recovery rate of companies like Sichuan Ruineng Silicon Materials and Kunming Yeyan has reached 50%, and the Asian silicon industry has been fully operational since March 2013.
Analysts from the Silicon Industry Branch noted that in addition to new recoveries, a few companies also increased output during the third quarter. The total industry output for the quarter reached approximately 21,000 tons, representing a 14.3% increase from the previous quarter.
Although spot prices have risen steadily and some companies are rushing to resume operations, most analysts believe this does not signal the end of the "cold winter" for the polysilicon industry. From a broader perspective of the PV sector, there is limited room for new market demand at year-end, which could lead to a sharp shift in supply and demand in the upstream polysilicon segment. Annual production and demand may only barely maintain balance.
"The resumption of some companies does not mean the industry has warmed up," one analyst said. "These companies are more focused on maintaining their production status to gain a competitive edge in the upcoming industry consolidation."
In fact, the polysilicon industry still faces many uncertainties, with overcapacity being the most pressing issue. This fundamental problem continues to hinder price growth and prevent the market from entering an upward trend. Some brokerage analysts previously estimated that domestic polysilicon demand could reach 80,000 tons this year, but current effective production capacity exceeds 140,000 tons. Even without considering imports, the oversupply situation in the domestic market is expected to persist for a long time.