Polysilicon cost drastically shut down the industry
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At the same time, TBEA, Grand New Energy (NYSE: DQ) is expanding or has completed the 10,000-ton polysilicon plant in Xinjiang, and benefiting from the province's low electricity prices, the production costs of the two companies are about 14 -15 USD / kg. In comparison, the current production costs of the remaining 40 polysilicon companies in China are in the range of 24-27 USD/kg.
At the same time, the Ministry of Industry and Information Technology officially announced in early December that it meets the list of "Regulations for Photovoltaic Manufacturing Industry" (hereinafter referred to as "Conditions"), in which 11 polysilicon enterprises were shortlisted.
"After several giants' expansion and low price competition, the remaining 11 companies in the next year are estimated to have only about 6-7 companies, and polysilicon companies outside the list may accelerate the bankruptcy. "A photovoltaic company executive in Zhejiang said that the "conditions" require polysilicon enterprises to produce 50% of capacity in the previous year. It is difficult for companies outside the list to meet the standard. The companies in the list will accelerate production at the end of the year." But in the end, there are not many that can reach the target."
After Zhejiang Xiecheng Silicon became the first polysilicon company in 2012, 80% of the polysilicon enterprises had stopped production. Today, 2014 is even more difficult for small and medium-sized polysilicon companies after the conditions and the expansion of the giants and low-cost competition.
Production limits for the Condition
The Ministry of Industry and Information Technology requires that the output of the year should reach 50% of the production capacity. The domestic top 10 polysilicon giants barely reached this year, and the remaining enterprises are difficult to complete.
The 11 polysilicon enterprises listed in the first batch of "Conditions" are: Liujiu Silicon, Luoyang Zhongsi, CSG Silicon Materials, Zhongneng Silicon, Asia Silicon, Yellow River Upstream and Downstream Hydropower Development Company, Shaanxi Tianhong Silicon materials, Ruineng silicon materials, Yongxiang polysilicon, Xinte Energy (a solar energy company under TBEA), and a new energy source.
The above-mentioned Zhejiang PV company executives expressed surprises on the list. In its view, the six-nine silicon industry has been discontinued, and LDK is only temporarily suspended but not listed. "So it is not clear whether there is a second list." The 21st Century Business Report was informed that the 21,000-ton capacity of LDK is about to resume production.
In fact, with the promotion of “double opposition†in Europe, America and South Korea, some domestic polysilicon enterprises have resumed production. According to the data provided by the Silicon Industry Branch, as of the end of the third quarter, there were 10 companies that announced the resumption of production. In contrast, there are currently 43 polysilicon enterprises in China.
The "Conditions" also require that, according to the specifications, the scale of polysilicon projects should be greater than 3,000 tons per year on the scale of production. When the declaration meets the list of specifications, the actual production in the previous year is not less than 50% of the capacity requirements.
"The market in the second half of this year is better, but next year's market may not be very optimistic." Wang Haisheng, executive general manager of Ping An Securities Energy Finance Department, analyzed the 21st century economic report. The Ministry of Industry and Information Technology requested that the output should reach 50% of the production capacity. Look, the domestic giants of polysilicon 10 barely reached this year, and the remaining companies are difficult to complete.
In contrast, according to the “Regulations on the Standardization of Photovoltaic Manufacturing Industry†and the “Interim Measures for the Administration of Specification Regulations for Photovoltaic Manufacturing Industry†issued by the Ministry of Industry and Information Technology, 11 polysilicon enterprises will continue to enjoy the market application support and the national introduction after the end of the public notice period. Credit support and other policy support.
Wang Haisheng’s point of view is that this means that unfinished companies have difficulty accessing the bank credits they deserve and export tax rebates. Coupled with high cost factors, the possibility of shutting down is even greater.
For the resumption of production, the greater pressure lies in the cost suppression of GCL-Poly, TBEA, and new energy.
Lu Jinbiao said that the silane method is a revolutionary technology compared to the current modified Siemens method for polysilicon. “The cost is less than half of the improved Siemens method, and the power consumption is less than one-thirdâ€, thus achieving a rapid reduction in the overall production cost.
A TBEA executive told the 21st Century Business Report that in the comprehensive production cost of polysilicon, electricity costs account for about 40%, and the company's electricity price is due to its own power plant, which makes TB's polysilicon cost can be reduced to 15 USD/kg.
The cost of electricity for the new energy is about 0.41 yuan / kWh, which is to reduce its production cost to 15 US dollars / kg.
Wang Heng, general manager of Chengdu Henghai Chemical Technology Service Co., Ltd. told 21st Century Economic Report that if the cost of the three giants can drop to around US$15/kg in 2014, 90% of domestic polysilicon enterprises will be uncompetitive. In fact, many companies are now waiting to see, and there is no money to invest in technological transformation, and the cost is high."
Three giants cost suppression
In 2014, the price of polysilicon will drop to around US$15/kg, while only 3-4 companies in China can achieve such a cost.
In the third quarter of 2013, domestic polysilicon production was 21,000 tons, up 14.3% from the previous quarter. Jiangsu Zhongneng accounted for 63% of total domestic production; in the third quarter, imported polysilicon was about 18,000 tons. Together, the total domestic demand is 39,000 tons.
Lu Jinbiao, deputy general manager of Zhongneng Silicon Industry Co., Ltd. said that the production of Zhongneng Silicon Industry in 2013 can reach 50,000 tons, and is expected to be around 60,000 tons in 2014.
“We are now basically producing capacity and can reach 1,000 tons of production.†The above-mentioned TBEA executives said that the monthly output in 2014 can reach 1,100 tons. Considering the one-month maintenance period, the annual output can also reach 1.2. Ten thousand tons.
Big New Energy claims that the expansion of capacity to 12,000 metric tons has started and is expected to be launched by the end of 2014. Once fully operational, the company expects polysilicon production costs to fall to $12 per kilogram.
Wang Haisheng said that in 2014, the demand for domestic polysilicon was 140,000-150,000 tons, and the supply of the Big Three reached 80,000 tons. In addition, Luoyang Zhongsi, CSG, and Ruineng, which cost about 18 US dollars/kg, Enterprises can reach 100,000 tons, plus 40,000-50,000 tons of imports, leaving little room for surplus polysilicon enterprises.
After Zhejiang Xiecheng Silicon became the first bankrupt polysilicon company in 2012, 80% of polysilicon has been discontinued. Taking Sichuan as an example, Xinguang Silicon has been discontinued for two years, and the survival of Ledian Tianwei is also standing at the crossroads.
“The key is price.†Wang Haisheng said frankly that the price of polysilicon in 2014 will drop to around US$15/kg, while only 3-4 companies in China can achieve such a cost, which will lead to the continued loss of the company.
GCL-Poly sold about 4018 tons of polysilicon in the third quarter, up 511.6% year-on-year; the new net energy revenue in the third quarter increased 40% year-on-year to 29.6 million US dollars; TBEA is also in full production.
Wang Heng believes that after years of losses, and the price competition is becoming more intense, the bankruptcy of domestic polysilicon enterprises will increase. "At present, some companies are already selling equipment such as reduction furnaces and hydrogenation furnaces, and plans to withdraw from this industry." But he did not disclose the name of the equipment company.
Lu Jinbiao expects that many companies will withdraw from the polysilicon industry after 2014. “The concentration of the industry will be higher in the future, and it will be more inclined to lead enterprises, which will make the pace of structural adjustment even greater.â€
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