Renewables MMI®: Solar Silicon Price Jumps, Tariffs Finally Working?

Silicon is essentially sand. But for use in semiconductors and solar panels it needs to be refined to a purity of 99.99999 %. This makes the second-most abundant resource in the world a commodity as its availability is limited by worldwide refining capacity.

Free Download: Latest Metal Price Trends in the June MMI Report

We have long lamented the trade war going on over refined silicon over the last few years. Big companies such as German-based multinational Solarworld, Inc., want higher prices, saying their panels are of higher quality than those offered by smaller, mostly Chinese, producers. Solarworld’s claim to higher quality rests on the fact that its panels’ capture technology is made from actual crystalline silicon. The average thin-film cell has a conversion efficiency of 6%, while the average crystalline silicon cell has a conversion efficiency of 15%.

The thin-film producers are relying on lower production costs to deliver lower prices but using their products would require a business or homeowner to install more panels to achieve the conversion rate of fewer silicon panels.

Thornton, Colo.-based manufacturer Ascent Solar Technologies, for example, uses thin films made of raw materials other than silicon such as copper, indium, gallium and selenide (CIGS) in their panels. Foxconn, a Chinese electronics manufacturer, is a major supply chain partner for Ascent, which established a joint venture in July 2013 with the government of the city of Suqian in Jiangsu province to build a facility to manufacture Ascent’s proprietary thin-film CIGS PV modules there.

Not all supply chains in solar, therefore, are equal.

US Factory Capacity Increasing

Installers in US markets are reaping a windfall by using the cheaper panels for installations that are subsidized by states such as California and the low cost of the cheap imports. While it was kind of funny to see Solarworld wrap itself in the flag when it successfully petitioned the Commerce Dept. for tariffs on Chinese panels, and then Chinese silicon, itself, Solarworld has simultaneously stepped up its US presence and seems to be willing to fight for the US market.

Meanwhile, Elon Musk’s SolarCity, an entirely American-owned operation, is building a massive $5 billion
“gigafactory” in Buffalo. When the silicon solar panel factory is completed and running full-tilt (projections within two years), it will be the biggest solar panel plant in North America. To run at full speed, the plant will need an elaborate network of suppliers and service firms to support it.

Is Domestic Demand There Yet?

Is there enough solar demand for companies like SolarCity and SolarWorld to get their prices increases AND see sales grow? A significant price spike in silicon in the Eenewables MMI this week is certainly a step in the right direction. The tariffs placed on Chinese panels and silicon seem to be having the desired effect, as well. The European Union renewed similar duties this week, essentially stifling Chinese exports to the West with high tariffs in both markets.

Actual Renewables Prices

The week’s biggest mover on the weekly Renewables MMI® was the price of silicon, which saw a 8.2% increase to CNY 15,800 ($2,546) per metric ton. This comes on the heels of a 7.6% decline the week prior. The price of Chinese steel plate fell 3.2% over the past week to CNY 2,410 ($388.34) per metric ton. This was the fourth week in a row of declining prices. At CNY 226,000 ($36,417) per metric ton, the week finished with no movement for Chinese cobalt cathodes. Neodymium prices held steady from the previous week at CNY 368,000 ($59,298) per metric ton.

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Japanese steel plate remained essentially flat from the previous week at JPY 80,000 ($642.18) per metric ton. Following a steady week, prices for Korean steel plate closed flat at KRW 470,000 ($417.53) per metric ton. The price of Chinese steel plate fell 3.2% over the past week to CNY 2,410 ($388.34) per metric ton. This was the fourth week in a row of declining prices. US steel plate traded sideways last week, hovering around $575.00 per short ton.

US grain-oriented electrical steel (GOES) remained essentially flat at $2,357 per metric ton.

The Renewables MMI® collects and weights 8 metal price points used extensively within the renewable energy industry to provide a unique view into renewable energy metal price trends. For more information on the Renewables MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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