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| 26.03.2012: The silicon sector’s woes are indeed as dire as you’ve been hearing. And there’s little relief in sight. That was the theme at PHOTON’s 10th Solar Silicon Conference, Monday in Berlin, where the dour industry outlook was reflected in the mood of the nearly 200 attendees. Leading industry and company representatives agreed that a massive supply overhang will only get worse this year, forcing prices down toward the cash cost to produce. Even after the likely bankruptcy of dozens of non-competitive players, the six or so largest producers will still have more than enough capacity to meet expected demand – for at least four more years. “Only a few solar silicon (producers) are likely to survive,” said Martin Meyers, of PHOTON Consulting. He thinks just 11 manufacturers will make it to 2013, with any company unable to produce for less than $30 per kg in danger of irrelevancy. There is 200,000 kg of supply that can be produced for less than that cost already, easily exceeding anticipated 2012 demand. “The days of $40 (per kg) contracts are gone,” says Goran Bye, CEO of LDK Silicon. Henning Wicht, a consultant with IHS iSuppli, predicts spot prices will fall to $22 per kg in 2012 – and stay there in 2013. “The overcapacity is not going away,” he says. Meyers says prices will range from the all-in cash cost, roughly $20 to $25 at industry leaders, to a ceiling of $35 for entrenched suppliers with established customers. A year ago, silicon sold for 2.5 times that upper figure. “The willingness to pay for silicon will never approach $80 to $100 again,” he says. That will be doubly true in 2012, as the solar sector gets set for its worst year of installation growth. Meyers predicts global installations will actually contract in 2012; Wicht says they will remain essentially flat at 27.5 GW or so. Either way, the 50 percent compound annual growth rates the industry has become accustomed to will not occur. That will lead to capacity reductions in silicon, with Meyers predicting roughly 25 percent of 2012 capacity not making it to the following year. “Plants that idle for 12 months have nearly zero chance of starting again,” Meyers said. He and Wicht both expect massive expansion plans announced by the largest companies – including Hemlock Semiconductor, Wacker Chemie and OCI – to be delayed, and in some instances, possibly scrapped. Source: PHOTON http://www.photon.info |
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