Polysilicon Slump Grows as Spot Prices Fall Most Since June
October 18, 2011, 12:15 PM EDTBy Ben Sills
(Updates with New York-traded stocks in last paragraph.)
Oct. 18 (Bloomberg) -- A slump in the polysilicon market accelerated in the past week, with spot prices for the material used in solar panels tumbling the most since June, Bloomberg New Energy Finance data show.
Average polysilicon prices fell 6.1 percent to $41.13 a kilogram, according to the London-based researcher’s survey of contracts conducted Oct. 11 to Oct. 17. That compares with a 5.8 percent drop in the BNEF polysilicon price index a week earlier.
Polysilicon makers Wacker Chemie AG and Renewable Energy Corp. ASA have seen spot prices slide 48 percent since March as demand for solar panels slumped amid subsidy cuts in Germany and Italy. The decline may even force the biggest polysilicon producers to cut prices for clients tied into long-term contracts as oversupply ravages the industry, according to Sean McLoughlin, an analyst at HSBC Holdings Plc in London.
“You don’t want to watch your customers go out of business” because contract prices make them uncompetitive against rivals buying on the spot market, he said in a telephone interview.
REC, which Goldman Sachs Group Inc. raised to “neutral” from “sell” yesterday, dropped 3.4 percent in Oslo trading to 4.77 kroner. Wacker rose 1.4 percent to 78.66 euros in Frankfurt after earlier falling 1.9 percent when the prices were released.
Companies that fashion polysilicon into wafers and then cells for solar panels are forcing down the cost of the raw material as they attempt to claw back profit from polysilicon makers after a supply glut weighed on the price of their goods.
Prices for six-inch solar wafers and solar cells posted smaller declines with wafers losing 1.7 percent to $1.71 each and photovoltaic cells slid 1.4 percent to 69 cents per watt of capacity, according to data from New Energy Finance.
JA Solar Holdings Co., the biggest solar cell maker that is down 76 percent this year, fell 0.6 percent at 11:41 a.m. in New York to $1.69. Suntech Power Holdings, the largest panel maker, slipped 2.7 percent to $2.16.
--With assistance from Stefan Nicola in Berlin and Marc Roca in London. Editors: Randall Hackley, Amanda Jordan
To contact the reporter on this story: Ben Sills in Madrid at bsills@bloomberg.net
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net
