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 balanced. This positive development has encouraged some leading domestic polysilicon companies to gradually resume operations, easing the industry's prolonged production shutdown that had persisted for over a year. However, despite this improvement, some analysts still believe that several unfavorable factors continue to affect the sector, and it is unlikely that the market will break out of its "frozen" state during the year.
According to data from the Silicon Industry Branch of the China Nonferrous Metals Industry Association, the polysilicon price in China showed a steady increase in the third quarter. At the beginning of July, before the preliminary anti-dumping rulings from the U.S. and South Korea were announced, the spot price ranged between 105,000 to 135,000 yuan per ton, with an average of around 122,270 yuan per ton. Following the announcement of temporary anti-dumping measures against South Korean solar-grade polysilicon on July 18, the price rose slightly, reaching 134,000 yuan per ton by the end of September — a 9.2% increase.
With the progress of the "double reverse" ruling, many domestic polysilicon firms were motivated to restart their operations. According to the same industry association, as of the end of the third quarter, 10 companies had announced the resumption of production, including A-share listed companies such as TBEA and CSG A.
Among the newly resumed enterprises in the third quarter were: Luoyang Zhongsi, which achieved full recovery on August 18; Yichang CSG A’s polysilicon plant, which had been offline for 11 months for maintenance and upgrades, officially restarted on August 4; and Shaanxi Tianhong, which resumed operations in September after completing production shutdowns and staff training at the end of 2012.
TBEA’s 12,000-ton polysilicon project has now reached stable production, with expectations of full capacity by the end of 2013. So far, the single-line equipment has been commissioned, and the company has produced 400 tons of high-quality polysilicon products. According to statistics, the production recovery rate for companies like Sichuan Ruineng Silicon Materials and Kunming Yeyan has reached 50%, and the Asian silicon industry has been operating at full capacity since March 2013.
Analysts from the Silicon Industry Branch noted that, in addition to new resumptions, several companies also increased their output in the third quarter. The total industry output for the quarter was 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 production, most analysts do not believe this signals that the entire polysilicon industry has left the "cold winter" behind and is entering a period of growth. From the perspective of the broader PV industry, there is limited room for new market demand at year-end, which could lead to a sharp shift in the upstream polysilicon supply-demand balance. Annual production and demand may only barely maintain equilibrium.
"The resumption of production by certain companies does not mean the industry is warming up," one analyst said. "These companies are more focused on maintaining their operational status to secure a stronger position during the upcoming wave of industry consolidation."
Indeed, the polysilicon industry still faces significant uncertainties. One of the most pressing issues is the persistent overcapacity, which remains a fundamental challenge and continues to hinder the price from rising significantly. Some brokerage researchers previously pointed out that the domestic demand for polysilicon is expected to reach 80,000 tons this year, but current effective production capacity exceeds 140,000 tons. Even without considering imports, the oversupply issue in the domestic market is likely to persist for the long term.