More efforts are in the pipeline to ease surging polysilicon prices as China is promoting healthier development of the fast-growing photovoltaic industry, said ministry officials and experts.
More efforts are called for in the output expansion to increase the supply of polysilicon — a key material for PV module manufacturing — rational purchase from downstream buyers to improve supply and demand balance and a crackdown on illegal activities such as price gouging and hoarding products.
With such efforts, experts estimate that production capacity of polysilicon will expand and surpass 2.4 million metric tons in 2023, while the material supply will reach over 1.56 million tons — an equivalent amounting to the manufacturing needs of more than 600-gigawatt PV modules.
The remarks came after the Ministry of Industry and Information Technology (MIIT) released a notice on Sunday and called for strengthened self-initiative inspections and regulations for polysilicon companies.
The notice said that recently, product prices in some parts of the domestic PV industry have seen sharp rises, causing huge volatility to the supply chain, with reasons including but not limited to a complex international trade environment, COVID-19 resurgences, substantial increase in downstream demand and illegal activities such as price gouging and product hoarding.
The price of polysilicon reached 310,000 yuan ($43,400) per ton as of the end of August, up from as high as 247,000 yuan per ton at the end of January, according to the Silicon Industry of China Nonferrous Metals Industry Association.
Calculations from financial news provider Hexun showed that polysilicon has seen 29 rounds of price increases in the first eight months of this year.
The price increase of polysilicon was mainly due to a surge in demand driven by the low-carbon campaign on a global scale and the rapid development of the PV industry, said Lyu Jinbiao, deputy director of the expert commission at the Silicon Industry of China Nonferrous Metals Industry Association.
Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, shared similar views. "Currently China's rapidly developing PV industry is attracting investment backed by the country's carbon goals, as well as its plan to build massive wind and solar power projects in the Gobi Desert and other arid areas.
"The huge demand and the investment spree have driven up prices of polysilicon. The rising price has also attracted some businesses to conduct illegal activities such as price gouging and hoarding products to sell them at higher prices," Lin added.
Lyu said that production expansion of polysilicon materials normally takes more than one year — much longer than the expansion of PV power generators of less than six months — causing difficulties to strike a balance between supply and demand.
"To ease the surging prices, it is important to increase the supply of the material and call for rational purchase in the meantime from downstream PV facility manufacturers to avoid material hoarding for a larger market share," Lyu said.
Going forward, relevant departments will also further strengthen supervision and regulations and crack down on illegal activities such as price gouging, monopolistic behavior, and the sale of counterfeit and shoddy products in the industry, the MIIT said.
Editor: Leon
