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High polysilicon prices have been a key overhang in the solar segment of China's renewable sector, cited by various solar chain participants as the biggest constraint to new installations. With new polysilicon supply coming to the market, we expect polysilicon prices to soften by around 15% starting in the third quarter.
A decrease in polysilicon prices should help the entire solar value chain return to more rational pricing. Resolution of the polysilicon bottleneck will benefit overall solar installations, helping demand and sales of solar component manufacturers.
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Solar component manufacturers
With new polysilicon supply coming to the market, a key bottleneck for solar installations is removed. As downstream solar operators expand their generation capacity in 2H22-23, demand for solar components should benefit.
This should help drive the sales volume of solar component manufacturers such as Flat Glass Group (FGG). FGG plans to achieve 20,600 tonnes/day of glass production capacity by end-2022, up 68% y/y. Resolution of the polysilicon bottleneck should help drive demand for modules, of which FGG’s solar glass is a key component.
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