Polysilicon Continues to Rise
As China’s preliminary sanctions against European, American and Korean polysilicon are approaching, the spot price of polysilicon continues to rise this week, while downstream photovoltaic module companies are entangled. Reporters learned from the industry that some downstream companies hope to use the preliminary ruling on "double counterfeiting and anti-counterfeiting" as force majeure to lift high-priced import long-term orders (hereinafter referred to as "long-term orders"). However, companies such as LONGi that stocked up large quantities of low-priced spot silicon materials at the end of last year, because they benefited from the increase in polysilicon prices, opposed China's "double reverse" of European, American and Korean polysilicon.
n the past, when silicon material prices were high, long-term orders for downstream companies meant that they could obtain silicon materials at prices far lower than the spot market, which became an important guarantee for corporate operations and profitability. As the spot price of polysilicon has plummeted in the past two years, long-term price-locked orders have become a huge burden.
It is reported that there are several types of polysilicon contracts: one is a long-term order, the amount and quantity are determined in the contract; the other is a market-based contract that implements spot prices. The latter has become the most common method for major polysilicon upstream manufacturers including GCL-Poly, LDK Solar, Luoyang China Silicon, and Daqo New Energy. Even though these major manufacturers have previously signed long-term orders with downstream companies such as Suntech and Canadian Solar, Almost all were scrapped after the financial crisis.
In comparison, overseas polysilicon suppliers are different. At present, many downstream photovoltaic companies in China still have overseas long-term polysilicon orders of US$40-50/kg that need to be executed. At the end of last year, the market price of polysilicon fell to US$14 or US$15/kg. However, the buyer and seller made a strict agreement on the long-term order. Once the contract is terminated, the Chinese company will pay a large amount of liquidated damages.
A senior person in the industry revealed to reporters yesterday that many domestic big-name downstream companies are currently hoping that the polysilicon "double reverse" will quickly "cut out a high tax rate" so that they can have reason to lift the long-term high-priced import orders that have been "trapped" for a long time. Lose.
"If some companies did not clearly define 'force majeure' when placing long-term orders, or if they clearly listed 'double reverse' as one of the 'force majeure's, downstream companies would very likely use this as a basis to make a 'force majeure' claim. , to terminate long-term orders with overseas polysilicon manufacturers." said the person above.
However, other downstream companies that do not have long-term orders have a completely different mentality. "We believe that polysilicon 'double reverse' has no meaning. The current industry problems are caused by oversupply. Not only are Chinese companies encountering difficulties, overseas companies are also going bankrupt in large numbers. As for 'force majeure', it also depends on how the international trade court rules." Longi A senior executive of the company told reporters.
According to the reporter’s understanding, LONGi is the beneficiary of this round of rebound in polysilicon prices. According to industry rumors, LONGi stockpiled about 2,000 tons of polysilicon when the price of polysilicon fell to its lowest level in December last year. The current value of this batch of silicon materials has increased astonishingly.
In this regard, company executives also confirmed to this reporter that the company did purchase a batch of polysilicon from domestic and foreign countries at the end of last year at a price of 14 or 15 US dollars per kilogram. “We thought at the time that there was no risk of polysilicon falling to that price, so So we increased our purchases." According to calculations, this price after tax is equivalent to RMB 115,000 per ton, which was the lowest price in the polysilicon spot market at the end of last year. SolarZOOM data shows that polysilicon prices continued to rise this week, with the average quotation of domestic polysilicon primary materials reaching US$19.048/kg, and the price of imported silicon materials reaching US$20.369/kg.
Despite this, an executive of a downstream photovoltaic company believes that there is little room for polysilicon prices to continue to rise in the future, "at most to 25-30 US dollars/kg."
"Some photovoltaic downstream companies are worried about anti-dumping, mainly because they are afraid of insufficient silicon material and rising prices. In fact, after anti-dumping, domestic manufacturers can completely guarantee the supply of raw materials. For example, the leading manufacturer GCL-Poly's existing equipment has 60,000-70,000 tons when fully operational. Together with three or four other 10,000-ton enterprises, these quantities are sufficient for domestic needs. Moreover, some enterprises are making technological transformations. For example, the cost of using the silane fluidized bed method will be even lower, even as low as less than 10 US dollars/kg. ."
He pointed out that domestic consumption of polysilicon in 2012 was 140,000 tons, and the average supply price was about US$26/kg. After this year’s anti-dumping, foreign long-term orders are expected to be cancelled. Polysilicon is mainly supplied domestically, and the price has gradually risen from US$15-16 to a reasonable price of more than US$20, “but no more than US$30 at most.”
