Polysilicon cost drastically shut down the industry

On December 4th, Lu Jinbiao, Deputy General Manager of Zhongneng Silicon Company under GCL-Poly (3800.HK), revealed that the company’s modified Siemens process currently costs approximately $17 per kilogram. However, after completing the silane modification, this cost is expected to drop significantly to around $9 per kg. This technological advancement could drastically improve the company’s competitive position in the polysilicon market. Meanwhile, TBEA and Grand New Energy (NYSE: DQ) have either expanded or completed a 10,000-ton polysilicon plant in Xinjiang. Benefiting from the region's low electricity prices, both companies are able to keep their production costs between $14–$15 per kg. In contrast, the remaining 40 polysilicon companies in China still face higher costs, ranging from $24 to $27 per kg. In early December, the Ministry of Industry and Information Technology officially released the "Regulations for Photovoltaic Manufacturing Industry," also known as the "Conditions." A total of 11 polysilicon enterprises were shortlisted. According to industry insiders, only 6–7 companies are expected to remain in the next year, with those outside the list likely to face bankruptcy due to the stringent requirements. The "Conditions" mandate that companies must produce at least 50% of their capacity in the previous year. For many smaller players, meeting this standard is extremely challenging. As a result, listed companies are accelerating production toward the end of the year, but not all will be able to meet the target. Since Zhejiang Xiecheng Silicon became the first polysilicon company to go bankrupt in 2012, over 80% of companies had already ceased operations. Today, in 2014, small and medium-sized polysilicon firms are facing even greater challenges due to the expansion of major players and intense price competition. The Ministry of Industry and Information Technology has set strict criteria for polysilicon projects, requiring a minimum annual output of 3,000 tons. Companies that meet these standards will continue to receive support, including access to credit and policy incentives. However, those that fail to meet the requirements may find it increasingly difficult to survive. Wang Haisheng, Executive General Manager of Ping An Securities’ Energy Finance Department, noted that while the second half of 2014 looks promising, the outlook for 2015 remains uncertain. The pressure on smaller companies is immense, especially given the cost-cutting strategies of GCL-Poly, TBEA, and New Energy. Lu Jinbiao emphasized that the silane method represents a revolutionary shift compared to the traditional modified Siemens method. It reduces costs by more than half and cuts power consumption by two-thirds, making it a game-changer for the industry. TBEA executives highlighted that electricity costs account for about 40% of the total production cost. Thanks to their own power plants, they can reduce their costs to around $15/kg. Similarly, New Energy has managed to bring its costs down to $15/kg through efficient energy management. Wang Heng, General Manager of Chengdu Henghai Chemical Technology Service Co., Ltd., warned that if the three major companies can lower their costs to around $15/kg in 2014, 90% of domestic polysilicon producers would become uncompetitive. Many companies are now hesitant to invest in technological upgrades due to high costs and uncertainty. In 2014, the price of polysilicon is expected to fall to around $15/kg, but only 3–4 companies in China will be able to achieve such low costs. This will lead to continued losses for others, pushing more companies out of the market. GCL-Poly reported selling about 4,018 tons of polysilicon in the third quarter, representing a 511.6% year-on-year increase. Meanwhile, New Energy saw a 40% rise in revenue to $29.6 million in the same period. TBEA is also operating at full capacity. Wang Heng pointed out that with years of losses and rising price competition, more domestic polysilicon companies are likely to go bankrupt. Some are already selling off equipment like reduction furnaces and hydrogenation furnaces, signaling their intent to exit the industry. Lu Jinbiao expects that many companies will leave the polysilicon sector after 2014. He believes that the industry will become more concentrated, with leading companies driving further structural adjustments.

Metal Hole Saw

Metal Hole Saw,Carbide Big Hole Saw Bit,Metal Hole Saw Bit,Hole Saw Cutter Bit

Danyang Yongshun Tools Co.,Ltd , https://www.china-drill-bit.com