Abstract With the release of the third-quarter financial reports from most domestic photovoltaic (PV) companies in November, a clear turnaround in China's polysilicon industry has become evident. For instance, GCL-Poly sold approximately 41.18 million tons of polysilicon during the quarter, representing a year-on-year increase of 511.6%. Daxin Energy reported a 40% rise in net revenue compared to the same period last year, reaching $29.6 million. Meanwhile, TBEA forecasted that with the new production line coming online in the quarter, its polysilicon production costs dropped to $15 per kg, while market prices climbed above $18 per kg, signaling a potential shift from losses to profitability.
Supply and Demand Balance is Rebounding
Polysilicon serves as a critical raw material at the upstream end of the solar supply chain, feeding into silicon wafers, solar cells, and modules.
The recent recovery of the domestic PV industry, along with the imposition of anti-dumping and countervailing duties on Chinese polysilicon imports by the U.S. and South Korea, has helped restore balance in the polysilicon market. Currently, only a few firms remain competitive, as the industry has undergone significant consolidation. According to insiders, polysilicon supply is now tight due to many companies having been weeded out, meaning their nominal capacity hasn’t translated into actual output. Prices have risen slightly, from $18/kg to $19/kg, with expectations of further increases to around $22/kg next year.
Data from the China Nonferrous Metals Industry Association’s Silicon Branch indicates that ten polysilicon companies resumed operations in the third quarter, including China Silicon High-Tech, CSG A, and Shaanxi Tianhong. Meanwhile, companies like TBEA and Sichuan Ruineng are operating at about 50% capacity, while Asia Silicon is running at full speed.
According to the China Industrial Insight Network, domestic polysilicon production reached 21,000 tons in Q3 2013, up 14.3% from the previous quarter. Jiangsu Zhongneng accounted for 63% of total output. In addition, 18,000 tons of imported polysilicon were used, bringing total supply to 39,000 tons. On the demand side, crystalline silicon cell production was approximately 65,000 tons, matching the available supply, indicating a balanced market in the third quarter.
However, only a small number of companies truly stand out in the current landscape. Huang Wei, an analyst at Minsheng Securities, noted that the polysilicon sector has seen massive consolidation, with only a few players such as GCL-Poly, TBEA, and New Energy expected to survive long-term.
Survival Strategies Vary
Behind the restructuring of the polysilicon industry lies a history of rapid expansion and volatility. In 2007, driven by downstream PV demand, polysilicon prices soared from tens of dollars per kilogram to over $400. At that time, the mantra was "silicon is king," as securing polysilicon meant gaining a competitive edge in a component-scarce market. This led to the emergence of over 30–40 polysilicon companies in the following years.
But the market turned sharply in 2008. As downstream PV demand slowed, polysilicon prices fell back to $40/kg. Many companies that had rushed into the industry struggled with high costs and eventually exited. One notable example was Yingli Green Energy, which in 2012 wrote down its investment in Jiusix Silicon Industry by nearly 2.3 billion yuan, citing weak future profitability due to the global financial crisis.
Interestingly, Yingli’s decision proved wise in the long run. Analysts suggest that vertical integration isn't always beneficial, and specialization can be more efficient. Although the write-down was negative in the short term, it allowed the company to focus on core competencies and reduce operational burdens.
Yingli’s most recent quarterly report shows a 68% revenue increase to $596 million, driven by improved module sales and cost optimization. Its net loss for the quarter dropped from $162 million to $38.5 million, reflecting a positive trend.
Today, only those with strong core strengths can thrive in the polysilicon industry. Companies like Daquan, TBEA, and GCL-Poly have gained market recognition. Both TBEA and Big New Energy are leveraging low electricity costs—accounting for 30–50% of production costs—to gain a competitive edge. They’ve shifted operations to western regions like Xinjiang, where energy is cheaper.
As a leading player, GCL-Poly not only benefits from lower power costs but also enjoys a scale advantage, with an annual production capacity of 65,000 tons. Its mature technology and strong market position make it one of the most resilient companies in the sector.
Supply and Demand Balance is Rebounding
Polysilicon serves as a critical raw material at the upstream end of the solar supply chain, feeding into silicon wafers, solar cells, and modules.
The recent recovery of the domestic PV industry, along with the imposition of anti-dumping and countervailing duties on Chinese polysilicon imports by the U.S. and South Korea, has helped restore balance in the polysilicon market. Currently, only a few firms remain competitive, as the industry has undergone significant consolidation. According to insiders, polysilicon supply is now tight due to many companies having been weeded out, meaning their nominal capacity hasn’t translated into actual output. Prices have risen slightly, from $18/kg to $19/kg, with expectations of further increases to around $22/kg next year.
Data from the China Nonferrous Metals Industry Association’s Silicon Branch indicates that ten polysilicon companies resumed operations in the third quarter, including China Silicon High-Tech, CSG A, and Shaanxi Tianhong. Meanwhile, companies like TBEA and Sichuan Ruineng are operating at about 50% capacity, while Asia Silicon is running at full speed.
According to the China Industrial Insight Network, domestic polysilicon production reached 21,000 tons in Q3 2013, up 14.3% from the previous quarter. Jiangsu Zhongneng accounted for 63% of total output. In addition, 18,000 tons of imported polysilicon were used, bringing total supply to 39,000 tons. On the demand side, crystalline silicon cell production was approximately 65,000 tons, matching the available supply, indicating a balanced market in the third quarter.
However, only a small number of companies truly stand out in the current landscape. Huang Wei, an analyst at Minsheng Securities, noted that the polysilicon sector has seen massive consolidation, with only a few players such as GCL-Poly, TBEA, and New Energy expected to survive long-term.
Survival Strategies Vary
Behind the restructuring of the polysilicon industry lies a history of rapid expansion and volatility. In 2007, driven by downstream PV demand, polysilicon prices soared from tens of dollars per kilogram to over $400. At that time, the mantra was "silicon is king," as securing polysilicon meant gaining a competitive edge in a component-scarce market. This led to the emergence of over 30–40 polysilicon companies in the following years.
But the market turned sharply in 2008. As downstream PV demand slowed, polysilicon prices fell back to $40/kg. Many companies that had rushed into the industry struggled with high costs and eventually exited. One notable example was Yingli Green Energy, which in 2012 wrote down its investment in Jiusix Silicon Industry by nearly 2.3 billion yuan, citing weak future profitability due to the global financial crisis.
Interestingly, Yingli’s decision proved wise in the long run. Analysts suggest that vertical integration isn't always beneficial, and specialization can be more efficient. Although the write-down was negative in the short term, it allowed the company to focus on core competencies and reduce operational burdens.
Yingli’s most recent quarterly report shows a 68% revenue increase to $596 million, driven by improved module sales and cost optimization. Its net loss for the quarter dropped from $162 million to $38.5 million, reflecting a positive trend.
Today, only those with strong core strengths can thrive in the polysilicon industry. Companies like Daquan, TBEA, and GCL-Poly have gained market recognition. Both TBEA and Big New Energy are leveraging low electricity costs—accounting for 30–50% of production costs—to gain a competitive edge. They’ve shifted operations to western regions like Xinjiang, where energy is cheaper.
As a leading player, GCL-Poly not only benefits from lower power costs but also enjoys a scale advantage, with an annual production capacity of 65,000 tons. Its mature technology and strong market position make it one of the most resilient companies in the sector.
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