Polysilicon industry will scrape "integration wind"

The business club reported on February 11th that on the eve of the Spring Festival, a document that has a profound impact on domestic polysilicon and even the entire photovoltaic industry, “Polysilicon Industry Access Requirements,” was published in newspapers and websites.

Experts in the industry pointed out that the document is still largely directed against the chronic diseases of low-grade polysilicon projects in China that are heavily polluted and consume too much energy. After the document is issued, it will set a fairly high entry barrier for the industry, which is good for the polysilicon manufacturers whose production capacity has been released, but it will bring considerable development pressure to some companies that have just entered or are planning to enter. At the same time, access conditions will also encourage companies to reduce costs and then pull down the price of polysilicon, and ultimately help to promote the parity of the Internet.

The industry threshold has risen sharply. The “Polysilicon Industry Access Requirements” (hereinafter referred to as “Entry Conditions”) released this time are basically consistent with the draft for the early last year: the minimum capital ratio of investment in newly-built and rebuilt projects should not be less than 30. %, Polysilicon projects shall not be built within 1,000 meters of the surrounding areas with high environmental requirements. The solar grade polysilicon project shall have a scale of more than 3,000 tons per year, and the solar grade polysilicon shall have a reduction power consumption of less than 80 kwh/kg.

“Although they are roughly the same, there are some minor changes.” Meng Xianzheng, deputy director of the China Renewable Energy Society, said in an interview with reporters yesterday that the officially announced “Entry Conditions” gave a year’s stricter regulations on power consumption. The grace period allows companies to have time to complete technological transformation.

According to the "access conditions", the reduction of solar-grade polycrystalline silicon before the end of 2011 must be less than 60 kWh/kg, and the recovery of silicon tetrachloride, hydrogen chloride, and hydrogen from the exhaust gas should be no less than 98.5%, 99%, and 99%. Before the end of 2011, we eliminated solar grade polysilicon production lines with an integrated power consumption of more than 200 kWh/kg.

However, according to Meng Xianxuan, the requirements for “access conditions” are still relatively high, many domestic companies cannot achieve it, and face many difficulties.

"Difficulty comes from two aspects: First, it is technical. Because of foreign technology, China's polysilicon purification technology is obtained through various channels. However, after all, it is not the most advanced, and many companies are unable to achieve a closed-circuit cycle; the second is funds. With the promulgation of 'No.38 Document', banks have stopped the polysilicon project, and enterprises will also face severe problems in order to carry out technological transformation,” said Meng Xianjun.

In spite of this, he told this reporter that the issuance of the “access conditions” is still necessary, and any industry should have certain access, otherwise it is not conducive to the long-term development of the industry. Taking into account the "access conditions" provisions have been relatively small, it is expected that there will be no other policies introduced in the short term.

Ping An Securities analyst Dou Zeyun believes that the polysilicon industry has large investment and slow output, and may face greater price competition and integration pressure in the next two years. This requires operating companies to have strong financial strength and risk tolerance. Therefore, for a plant already established, access conditions can effectively limit new entrants to impulsive investments.

"While this will relatively reduce the domestic supply growth in the short term, it can achieve effective allocation of policies and financial resources. While cultivating several large-scale enterprises, it can increase the quality of domestic polysilicon and drastically reduce production costs. It is conducive to the long-term healthy development of China's photovoltaic industry." Dou Zeyun said.

Industry giant benefit As early as in 2009 after the national tightening of polysilicon approval, the industry speculated that the future "Polysilicon access conditions" will benefit large companies. After the formal introduction of the document, the industry generally believes that the "access conditions" will trigger a major reshuffle of the polysilicon industry, and some large-scale plants will benefit from it.

Jiang Qian, chief energy analyst at China Investment Advisors, pointed out that 80% of China's current polysilicon manufacturers are small-scale enterprises, which are generally around a few hundred tons. These companies are not as large as they are in terms of scale and energy consumption. It will be the "big limit" that these small and medium-sized enterprises are eliminated.

According to estimates of Yang Ping, the new energy analyst of Guolian Securities, according to the investment cost of 800,000 yuan/ton, the capacity limit of 3,000 tons/year means an initial investment scale of 2.5 billion yuan, plus the minimum capital ratio of the project investment must not be less than 30%, both of which have greatly raised the financial barrier, some speculative companies will be rejected.

"This is conducive to the development of large enterprises within the industry. The latter can give full play to the advantages of scale and reduce production costs. At the same time, the industry concentration will be further improved." Yang Ping said.

Zhou Tao, an analyst at Great Wall Securities, also believes that after the introduction of the “admission requirements”, the polysilicon industry will usher in integration, and some smaller, lower-tech polysilicon production capacity will be eliminated, and production capacity with cost and technology advantages will be on the market. Stand still more stable, the industry structure may be closer to the oligopoly. He believes that CSG A and other companies that have significantly reduced their costs through technological transformation may benefit from it.

“CSG's cold-hydrogenation technology transformation project will reduce energy consumption and cost, and its cost will be reduced from about $38 per kilogram to about $30, considering its integrated photovoltaic industry chain. It is recommended that investors pay close attention.” said Zhou Tao. .

Jiang Qian's conclusion on the future industry pattern of polysilicon is: "The stronger is stronger and the weaker is out." In his view, "access conditions" will eventually allow China to form about 10 polysilicon producers.

Zhang Lei, a securities analyst at China Investment, proposed to focus on industry leaders with cost advantages, focusing on the low-cost impact of technological breakthroughs such as the proliferation of circulating fluidized bed methods and physical methods.

“In the long run, the decline in polysilicon prices is an inevitable trend, and companies with cost advantages will win out, and they are advised to focus on GCL-Poly (3800.HK). With the upgrading of technology, the industrialization of polysilicon manufacturing methods at a lower cost cannot be ruled out. Bring new opportunities in the industry, you can pay attention to Erdos." Zhang Lei said.

Industry integration Inevitably, no matter whether you are willing or not, some domestic small and medium-sized polysilicon companies are destined to usher in a real hardship in 2011, and a hurricane of integration of the survival of the fittest and strong waves will soon be blowing up.

"In the short term, the pressure of industry consolidation is still mainly from price competition." Ping An Securities analyst Dou Zeyun pointed out that the reason why this is said is that the polysilicon industry has the characteristics of high input and low output, it is difficult to make its production targets in the early stage of production. With more accurate judgments, it remains to be seen what effect the “access conditions” have on the performance of existing companies in the industry.

In fact, the growth rate of the PV industry in 2010 exceeded the expectations of almost everyone. According to the statistics of Ping An Securities, China's PV module production in 2010 was around 10 GW, which corresponds to a demand for polysilicon of 70,000 tons. In China, the polysilicon production capacity in 2010 was close to 90,000 tons, and the output was about 46,000 tons. According to customs data, cumulative imports of polysilicon reached 42,000 tons in the first 11 months of 2010. It can be seen that after considering the factors that increase the inventory, domestic demand for high-quality polysilicon is still very strong.

“Compared with foreign large-scale manufacturers, most of the domestic polysilicon companies are small-scale, high-cost and high-quality. With the increase in production capacity provided by foreign competitors, their living space is more challenged, if the downstream demand in 2011 and 2012 is not optimistic. , Polysilicon prices will have a larger decline, industry consolidation will be inevitable.” Dou Zeyun said.

Meng Xianyi said that if the threshold for access conditions can be met, the production cost of polysilicon can be controlled at around US$30/kg, which is very close to the average production cost of polysilicon in the world. “After all, the price is the core of the policy. The purpose of the “Entry Conditions” is to promote photovoltaic power generation through the national regulation as soon as possible. Citigroup analyst Zhang Lei also believes that “access conditions” for the short-term supply of polysilicon The impact is limited. In the long term, it is beneficial to low-cost large-scale enterprises to win, and the reduction of raw material costs is more conducive to the photovoltaic industry going towards parity.

He predicted that after the introduction of access conditions, some high-energy-consuming, high-cost and small-scale manufacturers will shut down their production capacity. However, the small physical volume of such manufacturers has a very limited impact on the supply and demand of the actual market; the "access conditions" are conducive to the promotion of Enterprises will reach the relevant targets faster and reach the target. New projects in the future will tend to declare on a larger capacity scale, which will help the industry form a cluster advantage, and the provisions of specific energy consumption and other indicators will help manufacturers to speed up the production cycle and Industrial upgrading with low cost and low energy consumption as the goal.

“At present, the spot market price is mainly priced by the top few polysilicon manufacturers in China. They have achieved access requirements in terms of scale, indicators, and environmental protection, so the chance of spot price disruption is very small. In the long term, access conditions are conducive to the industry. Accelerate the integration, low energy consumption and low cost will eventually help reduce the cost of terminal components, and the ultimate goal is to achieve affordable Internet access, said Zhang Lei.