Sunday, November 6, 2011

Polysilicon Drop May Stop Output From 90% of China’s Factories

Bloomberg is quoting analyst Xie Chen in a report to the China Nonferrous Metals Industrial Association as saying China’s polysilicon factories may suspend output in November 2011 because of a slump in prices.

GCL-Poly and LDK Solar have suffered as the commodity fell 21 percent in the past month to an eight-year low of $34.51 per kilogram, according to Bloomberg New Energy Finance data.

LDK and GCL-Poly, seeing an opportunity to drive out smaller competitors, are boosting production. Last week LDK announced plans to triple its capacity and make 55,000 metric tons of polysilicon a year by 2014. GCL-Poly said in March it would more than double polysilicon capacity to 46,000 metric tons this year.

Polysilicon production in China rose as much as 60 percent so far this year compared with the same period a year ago, while output of solar panels that use the material increased at only one-third of that rate, Xie said.

Spot price of polysilicon in China and Taiwan has fallen below US$30/kg, according to Chihheng Liang, an analyst of Digitimes Research. While international polysilicon suppliers are still sticking to US$30/kg, available polysilicon in China and Taiwan now falls between US$25-30/kg. The percentage of polysilicon at the US$28-29 price range is the largest percentage.

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