According to the latest survey conducted by EnergyTrend, manufacturers indicated that they are conservative about September orders and the PV market of 3Q11. On the other hand, the spot price of polysilicon remained at a high level. The Chinese market demand still stayed high, while other markets showed signs of slowing. According to EnergyTrend, downstream manufacturers are conservative about spot price trend of polysilicon, primarily because most orders from large manufacturers are signed on contractual terms, and few make purchase on the spot market. The second tier and third tier manufacturers are the main active participants on the polysilicon spot market, but their combined purchase volume is much less than top tier manufacturers’. Therefore, it is estimated that the current spot market situation can not support polysilicon manufacturers to raise the price.
According to current market situation, manufacturers indicated that they put much focus on the Chinese local governments’ subsidies. To date, Jiangsu, Shandong, and Qinghai provinces have announced their local subsidies. Among those, the subsidy of Qinghai government attracted wide attention of Chinese PV manufacturers. However, EnergyTrend believes that fund availability is the key determinant factor for the subsidy program’s future success. Furthermore, subsidy releases show the Chinese local governments’ support for local PV industry developments. In particular, Jiangsu and Shandong, their PV industry developments have reached a certain scale. EnergyTrend indicates that the subsidy release can help locally based manufacturers to overcome challenge of the oversupply market.
Notably, the Qinghai government attempts to support its PV industry growth through the new subsidy in the hope of making Qinghai province become a big PV production base and market place. Currently, the Qinghai government has achieved the fundamental goal. However, the Chinese market is now the world’s biggest PV production base. At this stage, the accumulated production capacity in the southeast China can fully already meet the projected annual domestic market demand through 2020. Additionally, the northwestern China has also released new subsidy policy that might further spur the production output. Therefore, EnergyTrend believes that the risk of Chinese PV industry forming a bubble may increase, if the oversupply situation continues or even worsens without guidelines.
