Polysilicon under price fall pressure on fast capacity expansion

BEIJING, Oct 30, 2008 (Xinhua via COMTEX) -- Fast production capacity expansion may lead to waves of price drops for polysilicon in China and the world in the second half of 2009, analysts predict.

The prediction is grounded on the factor that many photovoltaic (PV) production capacity expansion projects in China will come on stream in the next two years, which as Zhou Hui with Orient Securities estimates may also lead to reshuffle of China's PV industry to eliminate inferior players.

So far, nearly 40 enterprises in China have announced to invest in polysilicon projects with combined annual production capacity exceeding 80,000 tons. It is estimated that a total new capacity of 30,000 tons will be added before 2010, which is equal to the global output in 2007.

Ding Wenhui, president of SEMI China, predicted that China would continue to expand its share in world polysilicon production capacity, from 25 percent in 2007.

Worry of governmental subsidy reduction and policy changes in Western countries will also overshadow the prospects of the Chinese PV industry, which exports 90 percent of its products.

Ding called on the government to step up efforts to develop domestic PV market to guard against possible losses from world financial crisis and reduce dependence on international market.