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Polysilicon prices go up to $19 per kilogram
**Abstract**
Some analysts believe that in the near future, leading companies in the PV industry chain, such as GCL-Poly, are showing signs of recovery. This trend is seen as a positive signal for the healthy adjustment and long-term development of the solar energy sector. On January 8th, GCL-Poly, China’s and the world’s largest polysilicon producer listed on the Hong Kong Stock Exchange, saw its stock rise by 6% in one day, closing at HK$2.65. Based on this, the company's market capitalization reached approximately $5.265 billion, further widening the gap with the second-largest photovoltaic company in the world, US-based First Solar, which has a market cap of around $4.52 billion.
Since mid-December last year, GCL-Poly's share price has risen by over 25% in just a few weeks, signaling strong confidence in the company's performance and the broader PV industry. As the world's largest polysilicon producer, GCL-Poly is playing a key role in driving the recovery of the Chinese solar market.
**Polysilicon Price Up, Cost Down**
Notably, rising polysilicon prices and decreasing production costs have also contributed to GCL-Poly’s stock performance. According to reports from Guoxin Securities Hong Kong, after a period of consolidation between October and November 2013, the prices of crystalline silicon and silicon wafers increased by 7% and 4.5%, respectively, reaching $19 per kilogram and $0.92 per piece in December. Compared to the 2013 low, these prices have surged by 23.2% and 14.1%.
Guoxin Hong Kong believes 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.
In addition, GCL-Poly is making progress on its 350MW power plant in Xuzhou and its technical upgrades using the silane fluidized bed method. These projects are expected to be completed by the end of Q1 2014 and before the end of the year, potentially reducing the company’s polysilicon production cost from around $17.3 per kg in mid-2013 to approximately $12 per kg in 2014.
Based on this "price up, cost down" scenario, 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: Stronger Hengqiang**
More importantly, the Ministry of Industry and Information Technology recently released the first batch of companies that meet the standards of the “Regulations on the Standardization of Photovoltaic Manufacturing Industry.†Only 109 companies were selected nationwide.
According to industry insiders, being included on the list is crucial for the survival and growth of PV companies. A source stated, “Companies on the list can access various policy supports, including loans and export tax rebates. Those not meeting the criteria face significantly higher costs and may even be eliminated.â€
In essence, the government is working to regulate the industry, eliminate outdated capacity, and push for deep structural adjustments. This process, often referred to as “stronger Hengqiang,†aims to promote sustainable and orderly development. At present, expanding photovoltaic applications and absorbing excess capacity remain top priorities. In the eyes of industry experts, the recovery of leading PV companies like GCL-Poly signals a healthy and necessary adjustment in the sector.