TrendForce: Improvements in Polysilicon Production Expected to Lower Costs for East Asia Manufacturers

Polysilicon manufacturers in Japan, China and Korea are improving their production processes in an effort to lower costs, according to EnergyTrend, a division of the Taiwan-based market intelligence firm TrendForce. In October, the Japanese firm Tokuyama began producing polysilicon at its Malaysia plant, which has a capacity of 13,800 metric tons. Initially, Tokuyama is expected to reach 70% capacity. The South Korean polysilicon manufacturer OCI will boost capacity to 10,000 metric tons. Hanwha Chemical, another South Korean firm, will add 3,000 to 5,000 metric tons of production capacity. 

SMP, a joint venture between SunEdison and Samsung Fine Chemicals, is using a new high pressure fluidized bed reactor process (HP-FBR) at its plant in Ulsan, South Korea and will increase polysilicon production from 10,000 metric tons to 13,500 metric tons. FBR is a fairly new polysilicon process through which polysilicon is deposited when monosilane gas mixes with silicon seed particles in a reactor, in a continuous process. It is an alternative to the dominant electricity-intensive Siemens method, which has been the industry standard for decades. “The FBR production method is a breakthrough for the solar industry,” said Angus Kao, a research manager at EnergyTrend, adding that FBR is expected to reduce the cost of modules significantly in 2016 to 0.4/W and 0.5/W. 

China-based GGL, another leading polysilicon manufacturer, will use the FBR production method to boost its production capacity to 25,000 metric tons next year. Other Chinese manufacturers will increase their respective production capacities to 20,000 metric tons. Overall, Chinese polysilicon companies will use their cost advantages to gain market share and their total capacity is expected to reach 150,000 metric tons, Kao said. 

Despite China slapping anti-dumping and countervailing duties of 53.3% to 53.7% on US polysilicon imports, Chinese manufacturers can use the OEM trading process to bring US and South Korean products into China while evading the duties. As a result, in August the China Ministry of Commerce and General Administration of Customs announced it would suspend the processing of applications for the polysilicon OEM trading business. Yet it is too early to evaluate the results of their decision. In the meantime, the global polysilicon supply chain and prices will be affected. 

This week’s spot-market prices 

Policy moves and changes in supply and demand caused short-term fluctuations in prices this week. Polysilicon contract prices were roughly flat. Since China will stop polysilicon OEM trading in the end of December, polysilicon prices fell to US$18.2/kg. 

Meanwhile, demand for high efficiency polysilicon wafers is stable. Prices moved up slightly by 0.56% to US$0.905/piece. The demand for high efficiency products has increased and is worthy of attention. Monosilicon wafer prices were stable. Chinese cell prices remained at US$0.32/W. But Taiwan cells, affected by low-efficiency cells falling to US$0.3, decreased to US$0.32/W. 

High-efficiency cell prices fluctuated, eventually falling 1.47%. Module demand is stable across the United States, Europe, Australia, China and India. Prices for the 250W increased 0.35% to U$0.575/W.