CHINA MOVES ON SOLAR PRICE
China Solar Silicon Production Curbed 30% to Lift Prices: Energy
February 16, 2012 (Bloomberg News)
"China’s polysilicon industry, the biggest supplier to solar-panel manufacturers worldwide, has idled almost one-third of production and may keep the plants closed until prices recover from a 60 percent plunge…The price tumble spurred the smallest producers including units of Baoding Tianwei Baobian Electric Co. (600550) and Dongfang Electric Corp. to halt plants…China has about 45 percent of global production capacity to purify silicon into polysilicon…
"The suspensions may be short-lived because the average spot price for the most expensive ingredient in making solar panels rose 9 percent since mid-December from a decade low [driven by a shift from European demand to China’s anticipated domestic demand]…[Chinese producers will double the number of panels that will be installed this year from the 2.2 gigawatts erected in the country in 2011]…"
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"…A recovery would boost margins for the biggest makers such as GCL-Poly Energy Holdings Ltd. (3800), China’s largest, and Hemlock Semiconductor Corp. of the U.S., which is No. 1 in the world by capacity…
"…[Chinese authorities and industry analysts] forecast prices will jump to $40 to $50 a kilogram this year. That’s enough to prompt a return to production in the first half of most of the halted plants, which…[are] about 30 percent of the total…Polysilicon will average about $30 this year, and companies including the units of Baoding Tianwei and Dongfang Electric will probably resume production as early as May…Bloomberg New Energy Finance has forecast polysilicon average spot prices to reach $25 per kilogram this year."