Anticipating polysilicon oversupply in 2024 as more and more manufacturers bring new capacity online, especially China’s Tongwei, Bernreuter Research warns of fierce cut-throat competition in this space in a new report. With its low manufacturing costs and proven product quality, Tongwei can push most new entrants out of the market.
“Tongwei is planning to bring 575,000 tons of new production capacity on stream next year, whereas we expect a market growth of 200,000 tons at most,” said Author of the Polysilicon Market Outlook 2027, Johannes Bernreuter.
According to the report that covers 36 companies, 14 are already constructing or are ramping up a new polysilicon plant. If all of these planned capacities are ramped up in 2024, Bernreuter believes the market will have an oversupply of 1.4 million tons.
The oversupply will also push down polysilicon prices that the report forecasts in 2024 to go under the ‘all-time low’ of $6.75/kg in June 2020. In comparison, the shortage of this raw material in 2021 and 2022 drove the spot price up to almost $40/kg.
Calling it the 3rd shakeout wave in the polysilicon industry, the report estimates a total of up to 2,400,000 metric tons (MT) of polysilicon capacity to be eliminated, compared to 275,000 MT during the 2nd wave that lasted from 2018 through 2020. The 1st wave between late 2010 and early 2013 wiped off 135,000 MT.
However, non-Chinese manufacturers Wacker, OCI, Hemlock Semiconductor and REC Silicon will not be impacted from the shakeout, points out Bernreuter thanks to the US’ Uyghur Forced Labor Prevention Act (UFLPA). This has created a separate, higher-price market for these companies as they do not use Xinjiang produced silicon metal as feedstock.
For 2023, Bernreuter forecasts the world to install 425 GW of new PV capacity led by China’s 235 GW, growing to 1.1 TW in 2027. He cautions that this rapid growth will fuel strong demand for silicon metal, which is made of quartz (SiO2) leading to quartz for silicon metal to run short in the second half of this decade.
Recently, BNEF updated its global PV forecast for 2023 to between 410 GW and 415 GW with China contributing 240 GW to the mix .
（Picture: Veer）
