On November 21st, the Chinese Ministry of Commerce announced the review result of dumping and dumping margin on the Korean polysilicon imports. It ruled that dumping of polysilicon imported by Korean manufacturers did exist. The duty rates are adjusted as follows:
Compare the new tax rates to the old ones, Hanwha Q-Cells’ dropped significantly, while OCI’s slightly increased. The duty rates for other companies increased substantially, which is similar to the previous forecast.
InfoLink believes that the tax rate adjustment this time won’t have much impact on the overall prices. According to InfoLink’s customs data analysis, China imports polysilicon of 4,500-7,800 tons from Korea every month, representing 45% of China’s total polysilicon import; in particular, the mono-Si wafer still highly depends on foreign providers.
However, OCI that mainly supplies the mono-Si wafers didn’t witness many changes in the tax rate; it’s still profitable for the company to continue shipping to China. Overseas polysilicon shortage that worried mono-Si wafer makers the most previously is not likely to happen.
Although the polysilicon market still witnesses serious short supply due to the equipment maintenance, prices remained high at RMB 150/kg. It’s difficult for wafer makers to accept higher prices. Therefore, the tax rate adjustment this time is not likely to bring fluctuation to the spot prices.
Looking ahead for next year, the price of polysilicon may swiftly decline because of the decreasing demand in the first quarter. If the price of polysilicon decreases to lower than CNY$ 115/kg, Korean polysilicon manufacturers with higher costs will be difficult to do the same. By then, a price gap may still exist between the raw materials of mono and multi-Si. Yet, as the duty increase is not obvious, mono-Si wafer manufacturers can still estimate the pricing strategies for next year according to the supply and demand of polysilicon.
InfoLink anticipates that wafer will be the sector that witnesss the most oversupply next year due to the following reasons - the duty rates of polysilicon does not have much impact, mono-Si wafer capacities will increase significantly from this to next year, the capacity of Longi and Zhonghuan together has already surpassed GCL, and the significant increase of capacities caused by the swtich of DW for multi-Si wafer makers. Therefore, there is likely to be a very intense price war for mono & multi-Si wafer makers next year. In the first quarter of next year, the price of mono-Si wafers may be lower than CNY$ 5/piece; furthermore, the price of DW multi-Si wafers will be significantly reduced to CNY$ 4/piece. Next year, the C/P ratio competition between mono and multi-Si wafers will still be one of the hot topics that everyone pays attention to.
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