Polysilicon prices go up to $19 per kilogram

Abstract Some analysts believe that in the near future, leading enterprises in the PV industry chain, such as GCL-Poly, are showing signs of recovery, signaling a healthy adjustment in the solar sector. On January 8th, China's and the world's largest polysilicon producer—GCL-Poly, listed on the Hong Kong Stock Exchange—saw its stock rise by 6% in a single day, closing at HKD 2.65. Based on this, GCL-Poly’s market capitalization reached $5.265 billion, widening the gap with the second-largest photovoltaic company in the world, First Solar, which has a market cap of $4.52 billion. Since mid-December last year, GCL-Poly's share price has risen by over 25% in just a month and a half. As the world's largest polysilicon producer, the company is leading the recovery of the global PV industry, especially in China. Polysilicon Prices Rise, Costs Fall Another key driver behind GCL-Poly’s stock performance comes from research reports by major institutions. Guoxin Hong Kong noted that after a period of consolidation between October and November 2013, the prices of crystalline silicon and wafers rose by 7% and 4.5%, respectively, reaching $19 per kilogram and $0.92 per piece in December. Compared to the 2013 low, these figures represent increases of 23.2% and 14.1%. In addition, Guoxin Hong Kong pointed out that GCL-Poly, which holds a 30% share of the global wafer market and nearly 25% of the polysilicon market, is well-positioned to benefit from the industry’s recovery. With demand rebounding, the firm expects polysilicon prices to rise from $17 per kg in the first half of 2013 to $21.2 per kg in 2014, while wafer prices could increase from $0.2 per watt to $0.25 per watt. Meanwhile, GCL-Poly’s 350MW power plant in Xuzhou and its technical upgrades using the silane fluidized bed method are progressing smoothly. The project is expected to be completed by the end of Q1 2014, with full operation anticipated by year-end. These initiatives are projected to reduce the company’s polysilicon production costs from around $17.3 per kg in H1 2013 to approximately $12 per kg in 2014. Based on the “price up, cost down” trend in polysilicon, Guoxin Hong Kong forecasts that GCL-Poly’s gross margin will jump from 6.6% in the first half of 2013 to 30.2% in 2014. Industry Adjustment Favors Strong Players More importantly, the Ministry of Industry and Information Technology recently released the first batch of companies meeting the “Regulations on the Standardization of Photovoltaic Manufacturing Industry.” Only 109 companies were selected nationwide. According to industry insiders, being on the list is critical for survival. An industry source said, “Companies on the list can access various policy supports, including loans and export tax rebates. Those not included face significantly higher costs, effectively putting them at risk of being eliminated.” In short, the government aims to regulate the industry’s development, eliminate outdated capacity, and push for deep structural adjustments, promoting stronger players. At present, expanding PV applications and absorbing excess capacity remain top priorities. As one industry expert put it, “In the near future, leading enterprises like GCL-Poly in the PV industry chain are leading the recovery, which is a clear sign of the industry’s healthy adjustment.”

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