New Surge in Downstream Need has Driven the Polysilicon Shortage to a Crisis Point - JinkoSolar

Apr 26, 2021 07:39 AM ET
  • In a main declaration, the global vice head of state of Chinese solar manufacturer JinkoSolar, Dany Qian, stated that polysilicon costs are not anticipated to go down for at least 6 months.

The company's general supervisor for South & Central Asia, Daniel Liu, specified that Jinko is not backing out from any one of the signed take care of its Indian consumers as a result of the raw product supply scarcity as well as the rising prices, as reported by undefined false reports. The firm has had record shipments to India in 2020 as well as Q1-2021!

Polysilicon cost rise as well as lack remains to loom the market requiring panel providers to slow down manufacturing. The price as well as supply situation has actually been continuously intensifying because in 2014. Market research firm, Energy Pattern reported the most up to date polysilicon cost of 135 RMB per kg, a rise of 3.31% contrasted to last month and expects an additional rate boost as much as 150 RMB/kg very soon. Not long after, media outlet, Solarzoom reported that polysilicon rates have struck perpetuity high of 150 RMB/kg which is virtually 3 times the Q2 2020 cost!

Originally, the issue was just a short-lived hold-up in materials as factories had to shut down when the coronavirus pandemic first struck. Although the production is back to regular currently, the brand-new rise in downstream need has driven the polysilicon situation to a crisis point.

" There is a storm of supply and also need factors taking place here. Yet basically, there is a brand-new level of capability demand that can not be stayed on par with, everyone is encountering the burden of this dilemma scenario," says Dany Qian, VP of JinkoSolar.

Some market experts have forecasted that these supply problems could continue a minimum of up until the 2nd half of the year and even later on due to the fact that Q4 is conventional the height period in China for task commissioning. Dany Qian, also highlighted another considerable concern, specifying that there is a severe imbalance in the chain of command when it pertains to obtaining supply for the limited capabilities of polysilicon.

The circumstance for Tier 2 panel manufacturers was a little even worse. They needed to cut their cell orders as panel sales fell due to the climbing price. However, they found themselves at the rear of the line when they attempted to reorder as the market rebounded.

Mr. Daniel Liu, GM, South & Central Asia, JinkoSolar additionally shared his views, particularly about the Indian market-- "Jinko has actually been the only international player that had the ability to guide with these resources supply and cost challenges without backing out from any of the signed deals with our Indian consumers. We have a distinct approach for India as it is just one of the largest and also most price sensitive market around the world. I would love to avoid away some recent unwarranted claims as reports, which indicated Jinko not being able to honor its dedications to its consumers. We have had an excellent record in India having the most effective of the clients in our feline. We saw an amazing 2020 regardless of the challenges positioned by the pandemic with over 1.2 GW of deliveries to India. In addition, JinkoSolar is the leading vendor to India in Q1 based on customs import information. This fact itself contradicts the incorrect reports claiming Jinko to back out of orders. There will certainly be an overlap, with need coming to a head during Q4 in India also because of the BCD announcement from following year forcing developers to safeguard deliveries by March 2022. This will certainly additionally leave little or no area for cost declines, however we are well geared up to face this challenge. Our emphasis and also dedication to India will just grow stronger as we make every effort to bring the very best products and modern technology to this market."

The worst influenced have actually been the Tier 2 and also the non-vertically integrated so called 'pure panel suppliers' merely because they were last to the event and were extremely based on the upstream supply which went with a toss when wafer and also cell suppliers increased rates significantly. Industry titans like JinkoSolar, Longi, JA are investing billions of dollars each year on polysilicon purchase as well as this is only going to increase moving forward as these major players ramp up capacity and enhance their market shares internationally. It is fairly evident that these firms will certainly be the front runner for polysilicon distributors as well as will certainly always obtain choice in the position, regardless of market problems, due to their scale as well as purchasing power.

It is evident that polysilicon scarcity is below to stay for a while. There are no signs of its supply catching up anytime soon. Moreover, this will certainly cross over to the entire eco system and it is anticipated that Silver and Copper will certainly additionally see upward price patterns.

Market specialists and also analysts following this circumstance extremely closely have actually ended that cost estimates that we are getting today are probably the very best and also the most affordable in the next 6-month timeframe or perhaps longer. The smarter players out there are already profiting from this and also partnering with one of the most trustworthy component suppliers for their near-term capability needs.