China's polysilicon price is rallying drastically as the demand on the downstream PV market has expanded rapidly this year.
An industry insider told Xinhua-run Shanghai Securities News that due to higher production cost and a shorter term of product delivery, the price of home-made polysilicon is about 450 yuan per kilogram or 66 US dollars per kilogram, which is much higher than the imported price of 60 US dollars/kilogram, though the home-made product is inferior to imported one.
The suspension of production at Mitsubishi, the largest producer of silicon in the world, and the suspension of supply by OTC, another large-scale silicon producer in Japan, has aggravated the shortage of raw-material supply of silicon on the global market.
On the current market, both solar cell producers and silicon wafer producers are worrying that the inventory of polysilicon to ensure a normal production is in a badly low level, and the inventory of some companies can only meet the demand for one-week production.
China has a big polysilicon production capacity, which is estimated at 100,000 tonnes a year by the end of this year, but only 57,000 tonnes of production capacity has been constructed and actual production was 20,230 tonnes at the end of 2009.
Market watchers are predicting that the price of polysilicon will reach a high of 70 to 80 US dollars or 476 to 544 yuan and the price rally is to kick off a new round of development in the PV market.
In these circumstances, those PV solar power companies with an integrated industrial chain, especially those with polysilicon production capacity like LDK Solar (LDK.NYSE), are more likely to find favor in the market.
LDK Solar, a solar wafer and PV product manufacturer in China, is building a polysilicon plant with an annual production capacity of 15,000 tonnes, and has put the first phase project with a capacity of 5,000 tonnes into trial operation. With the capacity of ensuring polysilicon supply and lowering production costs, such solar power companies may seize a bigger market share on the burgeoning PV market. (Edited by Han Bing)
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