Polysilicon serious excess global solar energy industry to welcome a major reshuffle

The photovoltaic solar market has come to reality to break the illusion. The industry’s most pessimistic forecast is that only five companies in the three major solar energy production sectors may survive until 2020.

“Supply of excess polysilicon is very, very, very serious.” Paul Remin, director of the research department of Tecondroka Securities in New York, has predicted that the pricing of polysilicon will stabilize at a level close to the cost of production for several years. Oversupply of raw materials, the solar energy industry can only "sweep," overseas media commented that the price of batteries and microchips will have no place to go, can only fall. The signal given by the market is clearer.

On November 16, Xinyi Glass, a maker of automotive and home appliance glass that was listed on the Hong Kong market in China, decided to delay the spin-off of its solar subsidiary. Xinyi Glass announced on the same day that due to the recent fluctuations in the global capital market and the long-term adverse effects of the sovereign debt crisis in several European countries on the global solar industry, the future development of the global solar industry remains unclear.

According to data compiled by Bloomberg, as the world’s five largest manufacturers have more than doubled their production, polysilicon prices have dropped from 475 US dollars per kilogram three years ago to the current 33 US dollars, a drop of 93%. Analysts at Macquarie Group expect that polysilicon will output 28% more than demand next year, which is 8 percentage points higher than this year's 20%.

“The photovoltaic solar market has apparently come to a time when reality breaks illusions.” Wacker Chief Executive Officer Rudolph Stodiger pointed out that excess polysilicon will squeeze the polysilicon producers Helmlock Semiconductor and Wacker Chemicals. The profit rate.

"As for how long the downturn in the polysilicon industry will last, I really can't answer it," said Stoddigarh.

The world's fifth-largest solar panel maker Trina Solar believes that most of the top solar module manufacturers will disappear in the next few years.

"Prices have plummeted and profit margins have been reduced, and the weakest solar companies will be eliminated." The company’s chief executive, Gao Jifan, said in an interview with overseas media last week that “the global solar industry is in the midst of mergers and acquisitions for ten years. From now on, 2015 is the first phase, during which approximately two-thirds of solar companies will be eliminated."

Gao Jifan predicted that only five companies in the three major solar energy production areas may survive until 2020. These three major areas are photovoltaic panels, solar crystalline ingots and wafers, and raw material polysilicon.

Up to now, three American solar companies including Solyndra have declared bankruptcy this year. More solar companies such as Forth First Solar and Yingli Green Energy have also lowered their revenue and profit forecasts. Solar equipment supplier Amtech Systems predicted earlier this week that the company’s quarterly results will be at a loss due to weak revenues and higher R&D costs.

Recently, it has been reported that the Ministry of Industry and Information Technology has organized development and reform commissions, the Ministry of Finance and other ministries to Sichuan, Henan and other places to discuss with the polysilicon industry enterprises, to understand the current production and operation status of industry enterprises. According to the investigation, the Ministry of Industry and Information Technology has initially formed the basic idea for stabilizing the development of the domestic polysilicon industry, that is, promoting the integration of the polysilicon industry and encouraging large enterprises to merge and restructure small and medium enterprises.

At the same time, relevant departments have released the first list of polysilicon companies that have passed the industry access review according to the previously published “Polysilicon Industry Access Requirements” (hereinafter referred to as “conditions”), and the first batch of companies entering the list are expected to become this time. Industry integration main body. The industry generally believes that the impact of this series of good news is the reason why the polysilicon sector has risen against the market recently.

On November 16, the stocks in the polysilicon sector rose against the market when the broader market fell below the 2500 mark. In early morning, Seiko Science and Technology and Silicon Research have gained more than 6%, while Topsun Energy and Leshan Power have gained more than 2%. Tianwei Change and CSG A have risen to varying degrees.

The government's decision to integrate five companies in the polysilicon industry is expected to enter the first list of polysilicon prices has been playing a decisive role in the solar PV market. However, since August this year, domestic polysilicon prices have continued to decline, and relevant statistics indicate that as of the end of October, domestic polysilicon insured prices have slipped to 200,000 yuan/ton to 250,000 yuan/ton range - within a short period of one month. The drop reached 30.1%.

Since the beginning of this year, domestic polysilicon prices have suddenly turned aside in addition to short-term breakthroughs of 700,000 yuan/ton in March. In June, it fell to 400,000 yuan/ton, and continued to decline after a short period of fluctuation until it fell below the current RMB 25 million/ton.

During the period, international polysilicon prices also fell sharply. As of the end of October, its price has dropped to 32 US dollars / kg to 40 US dollars / kg. The prices of WACKER, OCI and other major international manufacturers have all decreased by more than 20%.

While polysilicon prices have dropped sharply, the production capacity of polysilicon is still being released. It is estimated that by the end of 2011, the global polysilicon production capacity will reach over 320,000 tons, while the market demand will be less than 200,000 tons. That is, excess capacity is also one of the important reasons for the rapid decline in polysilicon prices.

In view of the above, the "condition" seems imperative. At present, there is news that the first batch of companies that are expected to enter the list in line with the "conditions" will become the main body of this industry integration.

It is understood that the finalist companies are in line with the "conditions" requirements of "solar grade polysilicon project each phase is greater than 3,000 tons / year, solar grade polysilicon reduction power consumption is less than 80 kwh / kg" and other standard requirements, this will also Become the subject of integration requirements. At present, there are 50-70 domestic polysilicon companies, and over 90% are small and medium-sized enterprises. The industry urgently needs to integrate.

In another development, the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Environmental Protection are jointly organizing experts to conduct a comprehensive review of the evaluation results and publicize the results of the review to the public. Enterprises that have no objection to the public announcement formally issue industry access announcements. Poly GCL, Shin Kong Silicon, Emei Semiconductor, LeTV Tianwei, and Yongxiang Polysilicon are expected to enter the first batch of companies.

Polysilicon prices are expected to stabilize at the beginning of the decapitalization phase. Sun Jianping, an analyst at Guotai Junan Securities, said that as the Ministry of Industry and Information Technology is pushing for consolidation in the polysilicon industry, it is expected that five companies such as GCL-Poly will have a higher probability of being the subject of this integration. At the same time, it also “doesn't rule out the possibility that individual companies may enter the first batch of lists. At present, there are more than 40 polysilicon manufacturers in China, and according to the results of on-site evaluation of polysilicon companies by the authority of the recent domestic authority evaluation agencies, there are several companies’ The assessment data complies with national industry access standards."

At the same time, he believes: “Intensifying industrial concentration will facilitate the concentration of resources to leading companies, further strengthen their cost advantages, and directly benefit from the consolidation. At the same time, early release of production capacity and shrinking demand will intensify competition in the industry. At this time, improve industry access thresholds. It is expected to ease the contradiction between supply and demand."

As for the price of polysilicon, Sun Jianping predicted that the “accelerated destocking” phase in the third quarter has ended, and now it has transitioned to the “de-capacity” stage. Panic selling has come to an end and polysilicon prices will stabilize in December of this year to January next year.

From the perspective of listed companies, Tianxiang-Guidian Consulting Institute of Vehicles and Vehicles advises Leshan Power: “The company's traditional businesses such as electricity, gas, and water supply are affiliated with public utilities, and its profitability is stable. The addition of polysilicon business has increased the company’s performance flexibility and is a determinant of company investment. The most critical factor in value is that the future domestic and international increases in polysilicon production capacity and the declining demand in the external markets in Europe and the United States will continue to exist, and the price of polysilicon will be adjusted downwards or will be in the long-term trend.The favorable aspect is that this year the introduction of photovoltaic power plant benchmark price policy will be made from the demand level. Polysilicon prices are supported."

Another analyst from Northeast Securities (000686) believes that among the individual stocks, the most preferred is Dongfang Electric (300,217). According to its further explanation, the current cost of polysilicon companies adopting the hot hydrogen method is relatively high, and the continuous decline in the price of silicon materials makes cold-hydrogenation reforms imperative. Cold-hydrogenation technology will be used in new construction lines, and Dongfang electric heating will be the only domestic cold hydrogen method. Electric heaters listed companies have high certainty in performance and are affected little by the current lows in photovoltaics.

The above-mentioned Northeast Securities analyst pointed out at the same time: “Secondly, consumables companies are also good investment targets when the sector rebounds. The barriers in this area are higher than the downstream of the PV industry chain, and are affected by the excessive production capacity of the photovoltaic main industrial chain, and they also have import substitution. The company's positives: The company's areas include: Tungsu Science and Technology, Stellar Technology, Shinsung Daiso, Fangda Carbon, and Nanyang Technology.

It is reported that the Ministry of Industry and Information Technology will introduce policies to support the consolidation of the polysilicon industry, and the polysilicon sector was once fully up on Wednesday morning and then dragged down by the broader market.

Supporting Policies Continue to Be Issued According to the China Securities Journal, the Ministry of Industry and Information Technology has initially formed a basic idea for stabilizing the development of the domestic polysilicon industry, that is, promoting the consolidation of the polysilicon industry and encouraging large enterprises to merge and restructure small and medium enterprises. The three ministries and commissions led by the Ministry of Industry and Information Technology are deliberating on formulating relevant supporting policies. According to the previously published “Polysilicon Industry Access Requirements”, the Ministry of Industry and Information Technology will soon launch the first list of polysilicon companies that have passed the industry access review. The first batch of companies entering the list are expected to become the main players in the industry consolidation.

According to another source, the target of domestic solar power generation installed by the “Twelfth Five-Year Plan” for renewable energy development by the end of 2015 has been raised from 10 million kilowatts to 15 million kilowatts. The new renewable energy power generation price addition scheme has also been established. The new renewable energy power generation price increase is expected to increase to 8 PCT/kWh, which is double the current 4%/kWh.

The outlook is not very optimistic. Are these policies beneficial to the polysilicon industry? It looks like the outlook is not very optimistic.

Before 2008, the price of polysilicon was at a high level. High profitability led to a large amount of domestic capital entering the polysilicon industry. The domestic production capacity expanded rapidly from less than 0.6 million tons per year in 2008 to 47,000 tons per year in 2010, and the planned production capacity It is up to 160,000 tons/year, which is far greater than the demand of the global market.

At present, the main global PV consumer market is in Europe, and Germany, Italy, Spain and other countries are the main ones, among which Germany and Italy occupy more than 50% of the market share. China's PV products account for about 90% of the world's exports. The European debt crisis, Germany, Italy, and other countries continued to decline due to falling demand for photovoltaic subsidies, and domestic PV modules and polysilicon manufacturers were hit hard. As of November 9, the domestic polysilicon mainstream offer 200,000-23, 000 yuan / ton, compared with the beginning of the 680,000-74 yuan / ton offer fell 2/3. As the unit price has fallen below the cost price, the China Non-ferrous Metals Industry Association’s silicon branch expects that by the end of November, 90% of the domestic polysilicon companies will enter into a state of shutdown and shutdown.

When domestic photovoltaic companies were suffering, the U.S. Department of Commerce officially launched an anti-dumping and countervailing investigation on Chinese-made PV products on November 9. Although PV products exported to the United States only account for 10% of China's total PV module exports, if the United States implements a “double counter” approach for Chinese PV companies, European countries are likely to follow suit. If so, the Chinese PV industry will face a greater crisis. Some policy support is really difficult to save the photovoltaic industry.

Advantageous enterprises will welcome opportunities Han Ling, an analyst at GF Securities, believes that the debt crisis in Europe and the United States is currently not a good solution, and there will be greater pressure on the market next year, making it difficult for companies to operate. The industry landscape in the future will undergo major changes, and integration will accelerate. Investors are advised to be cautious when selecting stocks, focusing on companies with good cash flow and financial stability, as well as technology and cost leadership in the segmented segments.

Hua Haitai United Securities analyst Wang Haisheng believes that the advancement of industry consolidation is accompanied by support for dominant enterprises and elimination of outdated enterprises. Therefore, companies such as Shin Kong Silicon, Tianwei Change, and GCL-Poly have already won the bid and can take the opportunity in the next five years. Accelerate the expansion of production scale and occupy a favorable position before the domestic market is fully started.

Dong Ming Securities analyst Wang Mingde suggested that investors, in the process of the main industry chain undergoing severe winter baptism, actively pay attention to the photovoltaic industry equipment sector can provide new technologies, new processes and effectively reduce the production costs of the main industrial chain enterprises, such as cold Hydrogenation technology and provide cold-hydrogenation core equipment of Jinggong Technology and Dongfang Electric Heat.