China-based GCL-Poly Energy Holdings has extended production from poly-Si material to solar wafers and has lowered quotes for 6-inch wafers to US$2.10, reflecting poly-Si costs of US$40-45/kg. This has brought pressure to reduce prices upon international makers of poly-Si, including US-based Hemlock, Germany-based Wacker and South Korea-based OCI, because their contract prices stand at US$50-55/kg currently. If they do not cut prices, clients are expected to suffer losses and consequently decrease output and, in turn, procurement of poly-Si.
The four largest suppliers of polysilicon are Hemlock, Wacker, OCI and GCL-Poly. Three of the four companies have been focusing solely on polysilicon, only GCL-Poly has entered the production of solar wafers.
Most wafer firms, including Taiwan-based companies, have been signing supply contracts with the other three polysilicon providers.
Industry sources stated that OCI has been seen as the firm with the most flexible pricing.
Falling prices throughout the solar supply chain have been an ongoing concern recently. The uncertainty in the market has caused a lack of demand. Solar firms are also concerned with the market in the second half of 2011 due to high inventory and Germany's possible incentive cuts.
Capacity will continue to decrease, said industry sources, if PV material firms do not adjust prices. This will cause the inventory build-up to move upstream to material suppliers. According to industry observers, flexible price adjustments are beneficial to both the material suppliers and their customers.
Other international suppliers of polysilicon include REC, MEMC, Mitsubishi, and Sumitomo.
Article translated by Jackie Chang
