Market chaos in the polysilicon market will continue and the industry is still a long journey

Since last year, influenced by many factors at home and abroad, the price of polysilicon has continued to drastically decline. Its fierce intensity has copied and even surpassed the plunge of glyphosate since the international financial crisis in 2008. It has been rare for many years. One of the tragic varieties. After more than a year of falling prices, the past worth of more than 3 million yuan has become a thing of the past. This year's domestic polysilicon offer fell from the beginning of 22 million to the current 13 million or so, a decline of more than 30%. At the same time, due to excessive losses, only 78 of the more than 40 large-scale enterprises in the country can maintain the start of construction. People can't help but ask: How long will it take for polysilicon to make a difficult journey?

----Strictly blocked exports At the beginning of the new century, with the continuous rise of international crude oil prices, Europe and the United States and other countries began to vigorously develop new energy sources, including photovoltaic power generation, with a view to slowing down dependence on oil. European countries such as Germany and Spain also subsidized their own solar power generation and quickly launched a huge solar photovoltaic market. The market is often attracted by the huge demand from Europe and the United States. The polysilicon industry in China has rapidly emerged, showing a tendency to blossom everywhere. In just three to five years, China has Become the world's largest polysilicon producer. However, it was not long afterwards. With the European crisis that occurred two years ago, the EU countries generally experienced a stagnant economy. European countries have canceled solar energy subsidies and foreign orders have plummeted. The demand for polysilicon has fallen to freezing point. The terrible thing is that domestic polysilicon has an external dependency of more than 95%. Exports have almost disappeared. Production and sales are seriously out of balance, and polysilicon prices are looming.

----Energy expansion has not ended yet. Since 2004, China's photovoltaic companies represented by Wuxi Suntech Power Co., Ltd. have risen to the forefront and have quickly entered the market in Europe and America to win the first barrel of gold. In the following years, polysilicon constantly staged a wealth myth in the market. In 2008, a box of 30 kilograms of polysilicon was sold at a price of RMB 100,000. Sichuan Home Company has recovered more than 1 billion yuan of investment in just one and a half years. As a result of this temptation, many domestic cities set off a new upsurge in building a photovoltaic pillar industry. They have rapidly built a number of large-scale enterprises in Jiangsu, Jiangxi, Henan, Sichuan, Inner Mongolia and Xinjiang. By the end of 2009, 19 polysilicon projects had been put into operation in China, with a production capacity of 30,000 tons/year, of which more than 10 were under construction. By 2010, the production capacity had exceeded 100,000 tons. It is expected that by the end of 2012, the domestic polysilicon production capacity will be nearly 200,000 tons. According to statistics, the existing domestic production capacity has exceeded twice the global demand. It is not surprising that the production and sales are seriously out of balance, and the price of polysilicon is going further and lower.

----Financing bottleneck At present, many companies start building or expand their capacity when the polysilicon price is the highest. However, the current project is generally faced with financing difficulties. As the ratio of inventories to current assets of most companies has been rising, and the gross profit margin of products has been declining all along, it is increasingly difficult for financial institutions to make loans. At the same time, financing in the capital market is also very difficult. Take Jiangsu, the largest photovoltaic province, as an example. In the first half of this year, seven companies in the province had initial public offerings blocked, including three photovoltaic companies. Some polysilicon companies desperation, can only sell inventory products for construction in progress, or to maintain the minimum scale of production and market---- dumping shocks to increase the domestic polysilicon industry this year suffered from the siege of foreign products. Relevant data show that from January to May of this year, imports of polysilicon from South Korea and the United States soared. Among them, imports of polysilicon from South Korea increased by 12.11%, prices fell by 62.32%; imports of polysilicon from the United States increased by 94.51%, prices fell 67.07%. And these imported polysilicon products are suspected of serious dumping. This situation of internal and external troubles can only lead to the domestic polysilicon companies to sell products at any cost to deal with, and its price trend is even more worrying. Not long ago, the Ministry of Commerce issued an announcement and launched an anti-dumping investigation on imported polysilicon products.

---- The difficulty of integration is not small In view of the above situation, the polysilicon industry has been identified by the State Council executive meeting as an industry with excess capacity, so it is hoped that the enterprises will actively carry out optimization and reorganization. According to the goals set by the “12th Five-Year Development Plan for Solar Photovoltaic Industry” released by the Ministry of Industry and Information Technology on February 24 this year, by 2015, leading enterprises of polysilicon should reach 50,000 tons, and backbone enterprises must achieve 10,000-ton level. However, in the face of the "small and scattered" status of domestic polysilicon enterprises, the road to integration within the industry is fraught with difficulties. After the Ministry of Industry and Information Technology announced the first list of 20 companies that met the "Polysilicon Industry Access Requirements" on December 13, last year, industry insiders suggested that these 20 short-listed companies should be integrated platforms to promote the polysilicon link in the photovoltaic industry chain. M & A integration process. However, most polysilicon companies are unable to implement acquisitions because of the high production costs of small-scale filial piety, and existing minority companies have expressed that they “are not as good as new ones”. It can be seen that the integration of polysilicon companies in the industry is very difficult. Under such circumstances, the chaos of polysilicon market prices will continue, and the difficult journey of the polysilicon industry will still be long.