The ongoing trade dispute between the US and China is still affecting the manufacture of polysilicon used for solar PV modules in both countries.
However, the effects are unequal, as the United States has lost virtually all access to China-made products, while Asia has benefited greatly from the trade standoff.
These are the latest findings from IHS, which noted that a rush in China to install solar projects before the deadline for feed-in tariff levels closes, on June 30, is actually the primary reason polysilicon prices are increasing, rather than the trade dispute, which has simply constricted supply. In fact, according to IHS, before the Chinese New Year in February, polysilicon sold for just $12 per kilogram, on average — but prices are expected to rise to $19 per kilogram by April.
“Strong demand for polysilicon prices is triggered by the FIT deadline in China,” said Karl Melkonyan, solar supply-chain analyst for IHS Technology. “Buyers cannot wait any longer to buy polysilicon for solar modules, if they want them produced and installed before the end of June. It is highly unlikely that polysilicon prices will continue increasing in the second half of the year, but a flat pricing outlook is certainly a possibility, if demand remains as high as previously forecast.”
Across the oceans, however, the US polysilicon manufacturers have virtually lost access to China — a big hit, considering that China is the world’s largest PV module-manufacturing base. As a result, IHS has detected “severe financial distress” across multiple US-based companies.
“Western manufacturers can no longer sell into China, which is leading to inventory over-supply and even causing some factories to close,” said Jessica Jin, solar supply chain analyst for IHS Technology. “Although they are trying to sell polysilicon at bargain prices, there is low demand for purchasing silicon outside of China, because most wafer factories are located in China.”
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