Recent polysilicon price fall and its impact on the module prices

Polysilicon is a key component in the production of solar panels, and its price trends have a significant impact on the overall cost of solar energy. Recently, the price of polysilicon has been falling rapidly, which is expected to have significant implications for the solar industry. Here are five key takeaways from the current polysilicon price trends:

1. Polysilicon prices are falling faster than expected: The current drop in polysilicon prices has caught many analysts off guard. Although a decline was anticipated, it is arriving sooner and faster than predicted. The price of polysilicon has fallen by more than 42% since its peak in November, according to reports.
2. The cooling market is driving the bearish sentiment: The bearish sentiment in the polysilicon market has been gradually strengthening due to the cooling of the market. As a result, most downstream buyers are currently standing on the sidelines, and second- and third-tier companies are watching the order placing of first-tier silicon wafer companies.
3. The price is expected to fall further: According to industry experts, the price of polysilicon is expected to continue falling, with a significant drop expected at the month-end. The main reason for this is the oversupply of polysilicon in the market, which is expected to increase further as the global manufacturing capacity of polysilicon is set to reach 536 GW by the end of 2023.
4. Polysilicon prices have a correlation with crude oil prices: The global price trend of crude oil and polysilicon appears to have a correlation. When crude oil prices increase, there is a global shift towards renewables, which in turn increases the demand for polysilicon. During the pandemic, when the global crude oil prices were at their lowest, polysilicon was also trading at its lowest level. However, as the ongoing Russia-Ukraine war is expected to keep crude oil prices high for at least a year, the module prices are also expected to remain high.
5. Limited number of polysilicon players in the market will keep prices high: Although the oversupply of polysilicon is expected to bring prices down, the limited number of players in the market is expected to keep prices high. Currently, there are only a few key players in the polysilicon market, and the entry barrier is quite high due to the capital-intensive nature of the business. As a result, prices are likely to remain high until more players enter the market and increase competition.

In conclusion, the recent drop in polysilicon prices is expected to have significant implications for the solar industry. While it is good news for those looking to install solar panels, it is a cause for concern for manufacturers and suppliers in the industry. As the oversupply of polysilicon continues to grow, we can expect to see further drops in the price of this critical component.