Bloomberg News

Polysilicon Falls 5.9% on Surplus Supply, EnergyTrend Says

October 19, 2011

(Updates with analyst comments from fourth paragraph.)

Oct. 19 (Bloomberg) -- The spot price of polysilicon, the raw material for most solar panels, fell 5.9 percent on an oversupply of the modules, according to data from EnergyTrend.

Average prices were $38.13 a kilogram in the week to today, compared with $40.51 a week ago, the Taipei-based researcher said on its website. The average selling price of multi- crystalline silicon wafers, produced from raw silicon, dropped 10 percent to $1.53 each, while solar cells, made from wafers, fell 6.7 percent to 62 cents a watt, EnergyTrend said.

Polysilicon makers have seen spot prices slide 48 percent since March as demand for solar panels falls amid subsidy cuts in Germany and Italy. Companies that fashion polysilicon into wafers and then cells for panels are pushing down the cost of the material as they seek to claw back profit from polysilicon makers after a supply surplus weighed on prices for their goods.

“Polysilicon prices keep sliding, and as there’s no sign of a slowdown or even an end, each further drop is a concern to investors,” Haakon Levy, an Oslo-based analyst at DnB NOR ASA, said in a telephone interview.

Polysilicon producer Wacker Chemie AG pared gains in Frankfurt, trading up 0.4 percent at 78.95 euros as of 12:50 p.m. local time, after earlier advancing 3.6 percent.

The decline in polysilicon prices may force the biggest producers to cut charges for clients tied into long-term contracts as oversupply ravages the industry, said Sean McLoughlin, an analyst at HSBC Holdings Plc in London.

Last week, prices for the material tumbled the most since June, according to Bloomberg New Energy Finance data. Average 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.

--Editors: Amanda Jordan, Alex Devine

To contact the reporters on this story: Ben Sills in Madrid at bsills@bloomberg.net; Stefan Nicola in Berlin at snicola2@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.


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