BEIJING, Aug. 26 /PRNewswire-Asia/ -- Himfr.com, one of China's leading B2B search platforms with more than 30 B2B industry websites to its name, analyzes China's poly-silicon market situation.
China's domestic price for poly-silicon has recently seen a 0.40 - 0.46 million RMB/ton rise, and supply appears to be strained. In the short-term, domestic silicon material prices are expected to rise by a further 0.5 million RMB/ton.
Silicon price fluctuations are largely due to the following reasons: First, the demand exceeds expectations. Second, the supply is lower than expectations. Last year, China's poly-silicon supply exceeded demand. This has made the domestic silicon material supply tense at times. Third, the bulk market is small and easy to control because the big companies' main sales modes are mature. This makes for smaller amounts of bulk sales on the open market. Historical experience has shown that, in these circumstances, silicon prices are easily driven up. Fourth, the actual cost to produce poly-silicon has increased and has severely influenced poly-silicon enterprises. In a better market situation; however, it will become an easy excuse to drive up prices.
By the end of year, the price of poly-silicon will not fall back. Upstream silicon factories will see several setbacks: first, technical barriers are too high and market risk is high. The silicon supply chain should enjoy high profit margins. Second, since 2008, due to the expected poly-silicon overcapacity, the price has dropped dramatically while other aspects of the value chain are stable. This has caused the downstream margin to be much higher than the upstream. This is expected to be a period of short-term prosperity. Third, at present, the national standards for admittance into industries of poly-silicon have improved, but loans are limited.
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