China's polysilicon industry: less than 10 competitive companies

With the release of the third quarterly report of most domestic PV companies in November, the reversal trend of China's polysilicon industry has become more and more obvious. Among them, GCL-Poly sold about 41.18 million tons of polysilicon in the quarter, up 511.6% year-on-year; the net revenue of Daxin Energy increased 40% year-on-year to 29.6 million US dollars; TBEA predicted in the quarterly report that with the third The new line was put into production in the quarter, the company's polysilicon production cost fell to 15 US dollars / kg, and polysilicon prices have risen to more than 18 US dollars / kg, the company's polysilicon is expected to turn losses as expected.

Supply and demand balance has gradually recovered

Polysilicon is used as raw material, which is located at the most upstream of the photovoltaic industry, and downstream of it is silicon wafers, cell sheets, and components.

In fact, with the introduction of China's "double anti-" (anti-dumping, counter-subsidy) primaries for polysilicon production in the United States and South Korea, and the recovery of the domestic PV downstream industry, the balance of supply and demand in the entire polysilicon industry has gradually recovered. For the polysilicon enterprises that can continue to work now, the biggest advantage comes from their peers: the polysilicon industry may be the most complete shuffling in the entire upstream and downstream PV industry chain.

Insiders said: "The supply of polysilicon is now tight. Because many companies have been shuffled and washed off, it means that although there is nominal capacity, it has actually not provided output. The price of polysilicon has recently risen slightly. From the original 18 US dollars / kg to 19 US dollars / kg, next year is expected to rise to 22 US dollars / kg."

According to the latest market data provided by the China Nonferrous Metals Industry Association Silicon Branch, as of the third quarter of this year, there were 10 polysilicon enterprises announced to resume production, including China Silicon High-Tech, CSG A, and Shaanxi Tianhong. The operating rates of TBEA, Sichuan Ruineng, Kunming Yeyan and other companies are almost half, and companies such as Asia Silicon have achieved full production.

According to China Industrial Insight Network, in the third quarter of 2013, domestic polysilicon production was 21,000 tons, up 14.3% from the previous quarter. Jiangsu Zhongneng's output accounted for 63% of total domestic production. In addition, the amount of imported polysilicon in the third quarter was about 18,000 tons, which means that the total supply reached 39,000 tons. In the third quarter, the output of crystalline silicon cells was about 65,000 tons, which was about 39,000 tons of polysilicon. It can be seen from this set of data that the supply and demand of polysilicon in the third quarter is basically balanced.

However, there are far fewer than 10 truly competitive polysilicon companies. Huang Wei, a new energy industry analyst at Minsheng Securities, said, “The polysilicon industry has now been integrated almost. It is estimated that only a small number of companies such as GCL-Poly, TBEA, and New Energy can finally develop.”

Each has a way to survive

Behind the reshuffle of the polysilicon industry, it was the previous "big dry, all over the place." The guiding companies have invested in polysilicon, which is a roller coaster-like market. The key year is 2007. Due to the expansion of the capacity of downstream PV companies at that time, the price of polysilicon once soared from tens of dollars per kilogram to more than 400. Dollar.

In the eyes of the industry, the basic business logic at that time was to “carry silicon as the king”. Whoever can obtain polysilicon materials can get a head start in the market where components are in short supply. Affected by this, in the next one or two years, there were as many as thirty or forty polysilicon enterprises.

Unexpectedly, the situation has changed suddenly. In 2008, it was not over yet. Due to the sluggishness of downstream PV companies, polysilicon materials fell back to the level of US$40/kg. At that time, many polysilicon companies that followed the trend were not competitive in cost, and most of them announced their withdrawal in the following years.

The most famous of these is Yingli Green Energy in 2012. In March of that year, it announced that it had reduced the value of polysilicon production company "Jiusix Silicon Industry" by nearly 2.3 billion yuan. Yingli said that due to the impact of the international financial crisis, the future profitability of Liujiu Silicon Industry may be lower than originally expected. If production costs do not have an advantage, continuing production can only lead to an increasing burden on the enterprise.

However, it turns out that Yingli’s actions at the time of impairment were also wise. According to the analysis of photovoltaics, “there is no need for vertical integration in enterprises. In theory, specialization is better.” Impairment is a negative in the short term, but it may not be a bad thing in the medium and long term.

Yingli’s three-quarter report released this year showed that the company’s revenue increased by nearly 68% to 596 million US dollars due to the rebound in component sales and the cost of unloading the package. The net loss for the quarter was 162 million from the same period last year. The dollar fell to $38.5 million.

At present, domestic polysilicon enterprises must have their core competitiveness in order to survive, and they are well-received by the market, Daquan, TBEA and GCL-Poly.

Big new energy and TBEAs are catching low electricity prices. For high-energy industries such as polysilicon, electricity costs account for 30%-50% of the total cost. Therefore, looking for low-cost regions, it has become a breakthrough in the polysilicon industry. key. Both companies turned their attention to the west and built a polysilicon production line in Xinjiang.

As the leader of China's polysilicon enterprises, GCL-Poly has not only taken advantage of the price of electricity, but has a scale advantage, with a production capacity of 65,000 tons/year. At the same time, the technology is mature and has strong competitiveness.

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