Since 2018, China's silicon industry has shown a new high output, industrial layout and industrial structure are continuously optimized, but the growth rate of demand is less than expected, the price fluctuates and the profitability of enterprises declines. Although the silicon industry is facing a series of problems and problems such as weak demand in stages, unbalanced structural supply and demand, and frequent international trade disputes, the future development of the silicon industry will be supported by the state's support for the development of new materials and new energy industries. The potential is huge. Our enterprises must work harder and harder, adhere to high-quality development, enhance the competitiveness of enterprises and the entire industry, and meet more severe challenges and brighter prospects in the future.
I. Operational situation and characteristics of industrial silicon industry
In the industrial silicon market, in the context of the continuous strengthening of environmental protection supervision and the adjustment of domestic supply side structure, China's industrial silicon industry has generally shown a stable and excessive trend since 2018. The specific performance is as follows: First, industrial silicon prices fluctuated and fell; Industrial silicon production hit a new high; third, domestic demand has new highlights, growth rate is less than expected; Fourth, industrial restructuring is carried out in an orderly manner.
1. Industrial silicon prices rise first and then decline
In the first eight months of 2018, China's industrial silicon prices rose first and then declined, and the overall trend of shocks fell. The average price of 553 industrial silicon was 12,408 yuan / ton, down 2.3% year-on-year; the average price of 441 industrial silicon was 13,448 yuan / Tons, down 2.7% year-on-year. Since March, industrial silicon prices have continued to weaken, and after entering the second half of the year, prices have fluctuated at low levels. As of the end of August, the average price of 553# and 441# was 11,850 yuan/ton and 12,550 yuan/ton respectively, which was 9.8% and 13.2% lower than the high price in mid-March. In the first eight months of 2018, China's industrial silicon prices showed a trend of rising first and then lowering, with the average price of 553 industrial silicon being 12,691 yuan/ton, up 22.4% year-on-year; the average price of 441 industrial silicon was 13,823 yuan/ Tons, up 20.1% year-on-year. In the second half of the year, the price fluctuated at a low level. As of the end of August, the average price of 553# and 441# was 12,250 yuan/ton and 13,700 yuan/ton respectively, which was 10.6% and 12.4% lower than the high price in mid-March.
The main reasons for the fluctuation of domestic industrial silicon prices are: First, some new capacity in Xinjiang is gradually released, and supply has increased. Second, demand growth in downstream aluminum alloys and organic silicon has weakened, not as expected, especially polysilicon. The demand in the field fluctuated greatly. Third, the exchange rate market volatility increased, which had a certain impact on exports. Fourth, the price of industrial silicon raw and auxiliary materials declined compared with the second half of 2017.
Although the domestic industrial silicon market price continues to fall, we believe that the market expectation is relatively optimistic in the future: First, the continued strong environmental supervision in the second half of the year will push up costs and promote the sustainable and healthy development of the industry. Secondly, the continuous supply side structure adjustment (elimination) The backward production capacity and limited new capacity will help ease the contradiction between supply and demand. Finally, the current market price is close to or lower than the production cost of most enterprises. The company's initiative to reduce production and respond to market price decline will also effectively support the market price.
2. Industrial silicon production hit another record high
According to the statistics of the Silicon Industry Branch, China's industrial silicon production in the first half of 2018 totaled 970,000 tons, an increase of 10.23% year-on-year, a record high for the same period. Xinjiang has the largest industrial silicon production in the first half of the year, with an area of ​​460,000 tons, accounting for 47.4% of total domestic production, an increase of 21.05%. Yunnan's production in the first half of the year was 155,000 tons, accounting for 16.0% of total domestic production, an increase of 3.33%. The increase in output in Xinjiang is mainly due to the smooth operation of the first phase of the Heshun Silicon Industry Shanshan Plant; the increase in production in Yunnan is mainly from Hongsheng Jinmeng Silicon.
Sichuan's production in the first half of the year was 105,000 tons, accounting for 10.8% of total domestic production, down 4.55% year-on-year. As a province producing industrial silicon earlier, Sichuan Province has gradually risen in Xinjiang in recent years and the price of some raw and auxiliary materials has risen rapidly. Under the support of no small hydropower price advantage, some silicon enterprises have taken the initiative to reduce production. The output of Sichuan Province showed a slight shrinkage.
3. Domestic demand growth rate is less than expected
In the first half of 2018, China's industrial silicon consumption was 650,000 tons, up 4.84% year-on-year, and consumption growth rate dropped by 7.9 percentage points year-on-year. In the first half of the year, China's aluminum alloys consumed a total of 168,000 tons of industrial silicon, a year-on-year increase of 1.82%; silicone consumption industry silicon 295,000 tons, an increase of 5.36%; polysilicon consumer industry silicon 160,000 tons, an increase of 10.34%.
Among them, the field of polysilicon is the highlight of the entire consumption. In the first five months of this year, the polysilicon market continued its strong demand. The first-line enterprises almost all overloaded, driving the consumption of silicon in the polysilicon industry to increase sharply year-on-year. However, in June, due to policy influence, market demand dropped significantly. In the silicone market, although the price continued to remain high, the operating rate did not increase significantly, and the aluminum alloy industry remained stable. The demand for industrial silicon in both areas was less than expected.
Not only did domestic demand increase less than expected, but there was also a certain degree of weakness in exports. According to the latest customs data, China's industrial silicon exports in the first quarter of 2018 were 197,000 tons, up 9.2% year-on-year. It is estimated that exports in the first half of the year were 390,000 tons, up only 2.6% year-on-year, mainly due to the following factors: First, Sino-US trade wars and high domestic prices have led overseas users to expand procurement channels and reduce procurement from China. Second, the RMB exchange rate fluctuated greatly and the wait-and-see attitude was serious.
4. The industrial structure is adjusted in an orderly manner.
Since 2017, the supply-side structure adjustment centered on environmental protection has been carried out in an orderly manner. First of all, some backward and uncompetitive production capacity in Yunnan, Sichuan and other places will be discontinued and production will be reduced. Secondly, the upsurge of investment in industrial silicon in Xinjiang is receding. Only Jingheyuan will release new capacity before the end of 2018. Finally, various places Environmental standards are being formulated, and environmental protection policies are being continuously promoted and implemented, prompting enterprises to invest more energy in energy conservation, potential reduction, cost reduction and product quality, which has effectively promoted technological progress in the industry.
Second, the polysilicon industry operation situation and characteristics
As far as the polysilicon market is concerned, supported by a large increase in domestic distributed installed capacity, the installed capacity of the Chinese market in the first half of the year reached 24 GW, which was basically the same as 2017. Among them, the distributed installed capacity is 12GW, an increase of 70%. Since the beginning of 5.312018, the domestic polysilicon industry has shown different stages of operation. After the "531" New Deal, the market experienced large fluctuations. The specific summary is as follows: Before June, the polysilicon industry operated smoothly and the output continued to record a new high. After June, the market was expected to be pessimistic, the industry quickly adjusted its structure, the rapid decline in output was rapidly reduced, and the price remained at a low level.
1. The price fluctuates weakly
In the first eight months of 20172018, the overall spot price of domestic polysilicon fell steadily and fluctuated, with an average price of RMB 116.74 million/ton, down 8.1% year-on-year. After the "531" New Deal, the price dropped rapidly from 126,000 yuan/ton at the end of May to 87,800 yuan/ton in mid-July, a drop of 30.3%. After that, the price rebounded slightly. By the end of August, the price rebounded 3.5% to 90,900 yuan/ton.
In mid-July, its price once fell to 87,800 yuan / ton, a decrease of 42.6% compared with the beginning of the year, and a drop of more than 30% from the end of May. Polysilicon prices have continued to decline since 2018, mainly due to the steady growth of domestic supply, and demand has not been consistent with supply growth, especially after the 531 “531†New Deal, due to market pessimistic expectations, market staged demand The pessimistic expectation of a vacuum market led to a phased vacuum in demand, coupled with downstream digesting inventories, and prices fell rapidly. Although the fourth quarter of 2018 and the first half of next year, the first half of 2019, the domestic PV installed capacity is not expected to be optimistic, but in the long run, the development prospects of polysilicon and photovoltaic industry are still promising. We are still confident in the polysilicon and photovoltaic industries. First of all, the cost of photovoltaic power generation is declining. It has already achieved parity in some areas of overseas markets, especially in emerging markets. In the future, its demand will show a blowout trend. It is expected that in 2019, especially the global market will maintain a stable development momentum. Secondly, Although there are frequent PV trade disputes, some regions, including the European Union, are constantly opening up the market. China's photovoltaic industry is also in the process of globalization, and the future trade disputes between countries will become increasingly weak on the global photovoltaic industry. Finally, with the continuous improvement of the domestic silicon industry technology level, the production cost is further reduced, and the domestic PV parity online price is expected to be realized within two years, which will also greatly promote the application of the photovoltaic market.
2. Supply continues to increase
According to statistics from the Silicon Industry Branch, by the end of August 2018, domestic polysilicon production capacity totaled 294,000 tons/year, including 16 production enterprises (including branch maintenance companies), with a production capacity of 215,000 tons/year and a shutdown production capacity of 79,000. Tonne/year, of which the production capacity of the resumption of production is about 54,000 tons/year, accounting for 18.4% of the total capacity. By the end of May 2018, there were 24 domestic polysilicon enterprises with a total production capacity of 298,000 tons/year, an increase of 28,000 tons/year from the end of 2017, including Xinjiang enterprises such as Ordos Polysilicon, Inner Mongolia Dongli and Tianhong Ruike. The production capacity has gradually increased.
In the first eight months of this year, domestic polysilicon production totaled 174,800 tons, of which the average monthly output of domestic polysilicon in January-May was 24,300 tons. From June, production began to decline month by month, and the output in August was only 15,700 tons, compared with the previous five months. The average production fell by 35.4%. Sorted by production, the top seven companies produced a total of 11,540 tons in August, accounting for 73.3% of the total output. There were only four in the production of more than 1,000 tons in August, namely: Jiangsu Zhongneng, Sichuan Yongxiang, Xinjiang Daquan, and Asian Silicon, with a total output of 57.4%. Since June, the domestic polysilicon supply has been shrinking, mainly due to the sudden drop in terminal demand. The downstream price has fallen sharply, and the price of silicon material has fallen below the average production cost level of the polysilicon industry. As a result, some production capacity has been forced to stop production and maintenance, and the number of maintenance companies is the highest. There are 14 companies, and as of the end of August, there are still nine companies still in service, and the supply of polysilicon has been greatly reduced. Domestic polysilicon production in the first eight months of 2017 was 173,000 tons, an increase of 9.5% year-on-year. In the first five months, the output reached 121,400 tons, and the monthly output reached 24,300 tons, a year-on-year increase of 23.6%. Among them, the output in May was 25,500 tons, and the operating rate exceeded 100%, the highest in history. From June to August, the monthly output decreased month by month, with 19,000 tons, 17,800 tons and 14,500 tons respectively. During the month of August, 12 domestic enterprises were shut down for maintenance, resulting in a domestic polysilicon production capacity of only 59.4%.
At the same time, the scale and concentration of domestic polysilicon enterprises continued to be relatively high. The top three Jiangsu Zhongneng, Xinjiang Special Variety and Luoyang Zhongsi produced 54.2% of the country's total output. Currently, the effective production capacity is 10,000 tons. The above 10 enterprises produced 94,000 tons, accounting for 79.4% of the country's total output. These enterprises have approached, reached or represented the international advanced level in terms of scale, technology, cost and quality.
In 2018, some new polysilicon production enterprises will continue to produce new or technological transformation and expansion projects. It is expected that the effective domestic polysilicon production capacity will increase by 13.126 million tons at the end of the year, and the effective production capacity will exceed 35 to 360,000 tons, which can meet the domestic production of 85GW cells. All raw material needs. In the supply of raw materials for the photovoltaic industry, it is basically possible to achieve substitution and self-sufficiency.
3. Technological progress and industrial transfer will jointly enhance competitiveness
In recent years, domestic polysilicon enterprises have continuously accelerated technological progress and strived to improve their competitive advantages. Through major technological transformations and process optimization, all major polysilicon production enterprises have achieved continuous improvement in production capacity and rapid decline in production costs with very little investment. Among them, the silane fluidized bed method granular polycrystalline silicon represented by Jiangsu Zhongneng and Tianhong Ruike has been initially mass-produced, and its cost is lower than the current mainstream improved Siemens method products, providing more high-quality and cheap raw materials for the whole industry. The foundation.
At present, the quality of domestic polysilicon products can not only fully meet the domestic PV industry production demand including single crystal products, but also a number of polysilicon production enterprises are also committed to the production and application of domestic electronic grade polysilicon, Jiangsu Xinhua, Huanghe Hydropower and other enterprises. High-purity electronic grade polysilicon has been recognized by downstream customers, and Jiangsu Xinhua products have been exported to South Korea.
At the same time of technological advancement, the entire polysilicon industry is moving to the low-cost regions of western China such as Xinjiang and Inner Mongolia. It is expected that by the end of 2018, the effective production capacity of polysilicon in Xinjiang will exceed 140,000 tons/year, accounting for 4039%; the effective production capacity of polysilicon in Inner Mongolia will exceed 60,000 tons/year, accounting for more than 17%. According to public information, the comprehensive cost of new capacity in the western region can be controlled at 60,000 yuan/ton. The above data shows that the competitiveness of domestic polysilicon is further enhanced by the transfer to low-cost electricity prices.
4. Global polysilicon industry structure adjustment
According to customs statistics, in the first half of the year, China imported a total of 69,000 tons of polysilicon, a year-on-year decrease of 16.9%. In the first five months, the import volume was 62,300 tons, a year-on-year increase of 7.4%. In June, the import volume dropped rapidly to 0.68 million tons, which was 45.6% lower than the average of the previous five months. In June, China’s imports from South Korea fell sharply to 1,429 tons, a 77% decrease from May.
Since June, the price has fallen rapidly. Not only have some domestic enterprises stopped production and maintenance, but many Korean companies have also carried out overhauls to jointly reduce production by controlling production and promote market supply and demand balance. It is expected that as domestic low-cost production capacity will be put on the market one after another, not only some domestic backward production capacity will withdraw from the market, but also some overseas production capacity will no longer be competitive. The trend of replacing imports is quietly presenting.
Third, the operation and characteristics of the wafer industry
Similarly, due to the advancement of silicon wafer technology, especially the full application of diamond wire cutting to promote the industrial structure adjustment of silicon wafers, the production capacity of monocrystalline silicon wafer enterprises represented by Longji and Central is growing rapidly, and the polysilicon wafer enterprises are also based on the original equipment. Technical transformations have resulted in overcapacity of staged wafers. Especially after June, due to the influence of the policy and the weak demand, the price of silicon wafers fell rapidly and the output also showed a significant decrease. . There is a clear structural adjustment.
1, the price continues to fall
Since 2018, the price of silicon wafers has continued to fall. The prices of polycrystalline silicon wafers and monocrystalline silicon wafers have dropped from 4.58 yuan/piece and 5.25 yuan/piece at the beginning of the year to 2.45 yuan/piece and 3.18 yuan/piece, respectively, with a drop of 46.5% and 39.4%, especially since June, fell by 18.3% and 24.3% respectively. Although the price of silicon wafers continued to fall, the average production cost of the wafer industry continued to decline in the context of the decline in raw material prices and the gradual manifestation of industry scale benefits. Leading companies still have certain profitability.
2. Further increase in industrial concentration
With the comprehensive promotion and application of the company, the monocrystalline wafer companies represented by Longji and Central have rapidly expanded their production capacity, while the polysilicon enterprises have also increased their production capacity by 20-30% through technological transformation. According to the statistics of the Silicon Industry Branch, by the end of 2017, the domestic silicon wafer production capacity was 95GW, of which the polysilicon wafer production capacity was 59GW and the monocrystalline silicon wafer production capacity was 36GW. It is estimated that by the end of 2018, the effective production capacity of domestic silicon wafers will exceed 140GW, and the production capacity of monocrystalline silicon wafers is expected to exceed 70GW, accounting for nearly 50%. The rapid expansion of wafer production capacity has also led to a rapid decline in prices, leading to a large number of discontinuation of polysilicon wafer companies, and single-crystal companies continue to cut prices in the expanding market share.
With the gradual increase in the market share of monocrystalline silicon wafers, the concentration of silicon wafers has further increased. According to the statistics of the Silicon Industry Branch, the domestic silicon wafer production in the first eight months of the first eight months was 60GW50GW, an increase of 303.89% year-on-year, of which the output of monocrystalline silicon wafers exceeded 26GW, accounting for more than 450%. In the first half of the year, five companies, including GCL-Poly, Longji, Jingke, Zhonghuan and Rongde Wafer, produced about 30GW, accounting for nearly 60%. It is expected that the market share of the top five in the year is expected to exceed 65%.
3. Strong alliance to lay the foundation for industrial development
At present, the wafer link is in an important period of industrial transformation. The leading enterprises represented by Longji and Central are actively deploying in Yunnan and Inner Mongolia. At the same time, in order to ensure the supply of raw materials, these companies are also engaged in strong joint or long-term strategic cooperation with leading polysilicon companies, including strategic cooperation investments including Longji and Tongwei, Central and GCL, Longji and Xinte, Daquan, OCI and other long-term procurement cooperation. This will help the entire industry to maintain stable and healthy development in the long run and rapidly enhance the competitiveness of the entire industry.
Fourth, the problems faced by the silicon industry and the development trend
In the past few years, the continuous growth of demand has brought about the prosperity of China's silicon industry. It is expected that the entire industry will shift from demand to supply and demand in the next 2-3 years. The structural adjustment of the supply side of the silicon industry has been further accelerated. The strategic shift of the industry to the west and the integration of strong and strong industries have become the development trend of the future silicon industry.
In summary, although the domestic silicon industry is currently in a period of weak demand, the old and new kinetic energy conversion stage, but the future industry prospects are still very bright. Therefore, it is hoped that the entire industry chain will strengthen cooperation, and from the aspects of standard construction, industry-university-research cooperation, integrated innovation, and industrial chain up and down, etc., we will actively cooperate and make the upstream and downstream industry stakeholders develop together and form. A community of interests to achieve win-win cooperation. Make new contributions to building a strong country in China's non-ferrous metals industry!
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