Chemical industry new materials Weekly report: polysilicon boom continues to rise

The core idea

1. Since 2022, polysilicon prices have continued to rise. As of July 15, 2022, the spot price of polysilicon was 270,000 yuan/ton, with a weekly increase of 5.2%, a monthly increase of 17.4%, and an increase of 53.4% compared with the beginning of 2022. At present, the price is still in an upward channel. On the supply side, polysilicon production capacity and output increased steadily, and new production capacity is expected to increase. In terms of capacity, China's polysilicon capacity increased from 515,000 tons to 557,000 tons in 2019-2021, with a compound growth rate of 4.0%. In terms of output, China's polysilicon output in 2021 will be 487,000 tons, with a year-on-year growth of 20.2%. From January to May of 2022, China's polysilicon production was 274,300 tons, up 28.7% year on year. With the rapid expansion of downstream demand, the release of polysilicon capacity may accelerate in the future. China plans to add 277,000 tons of polysilicon production capacity in 2022, up 49.8% from the total capacity by the end of 2021. It plans to add 570,000 tons of new polysilicon capacity in 2023, exceeding the full-year 2021 level. On the demand side, the rapid development of the photovoltaic industry continues to drive the demand growth. In 2021, the newly installed PV capacity in China was 53GW, with a year-on-year growth of 9.96%. From January to May of 2022, the newly installed PV capacity in China was 23.71GW, with a year-on-year growth of 139.3%. The rapid development of the photovoltaic industry has driven up the demand for polysilicon. The apparent consumption of polysilicon in 2021 was 596,000 tons, up 20.2% year on year. In the January-May period of 2022, the apparent consumption of polysilicon was 302,000 tons, an increase of 28.7% year-on-year. Inventories are in a downward channel. Polysilicon inventories have declined since mid-June 2022, and as of July 8, 2022, polysilicon plant inventories stood at 10,300 tons, down 9.6% from the beginning of June. In summary, the rapid development of the photovoltaic industry drives up the demand for polysilicon, and then drives the growth of supply. In addition, the current polysilicon price continues to rise, and the future polysilicon industry economy is improving.

2. As of July 15, 2022, the new Materials Index (885544.TI) was down 1.2%.

Seven of the 21 new materials sectors rose or were unchanged last week, while 14 fell. Among them, the top three are photovoltaic glass, photovoltaic auxiliary materials, carbon fiber, the increase is 6.0%, 5.0%, 5.0%; The top three declines were optical components, LED and electronic chemicals Ⅲ, down 5.5%, 5.3% and 5.2%, respectively.

3. New chemical material products were mixed, with dimethyl carbonate up 2.3% and PC down 2.5%. In terms of dimethyl carbonate, the main reason for the price rise is the shutdown of the salt red Sifang and Zhejiang Iron wind equipment, the operating rate decreased, resulting in the reduction of the output of dimethyl carbonate, superimposing the downstream electrolyte solvent, polycarbonate demand support, promoting its price upward. PC, the main reason for the price decline is the stable supply of domestic manufacturers, superimposed on the weak downstream demand, resulting in PC prices downward pressure.

4. Market review. Last week, out of 277 listed companies in new chemical materials, a total of 77 listed companies were up or flat, accounting for 27.8 percent, while 200 listed companies were down, accounting for 72.2 percent. The top 3 weekly increases were Yubang Xincai, Changhong Gaoke and Tongling Shares, with weekly increases of 21.8%, 21.3% and 21.0%, respectively. The top 3 weekly declines were Shi Da Shenghua, Jitai Shares and Honghe Technology, with weekly declines of 16.9%, 15.6% and 12.7%, respectively.

Investment advice

At present, polysilicon price continues to rise, capacity supply accelerates, and downstream demand is strong. The industry economy is expected to rise, and relevant production enterprises may benefit, such as Hesheng Silicon Industry, Daqo Energy, Xinan Corporation, Tongwei Corporation, etc.

Risk warning

The growth of photovoltaic installations is less than expected, the price of raw materials fluctuates abnormally, and the safety and environmental protection policies are upgraded.