Prices of polysilicon products, the main raw ingredient in solar products, have risen recently due to reduced production and favorable policies to promote domestic demand, injecting some hope into the industry amid its problems with overcapacity, analysts told the Global Times Monday.
The prices sank to a record low in the fourth quarter of 2012 when exports of solar panel products to the US and European Union stalled.
The US gave final approval on November 7, 2012 for anti-dumping duties ranging from 18.32 to 249.96 percent and additional countervailing duties of 14.78 to 15.97 percent on solar-energy products from China over the next five years. The EU also launched probes into Chinese solar panels in September and November last year.
China, the world's biggest producer of solar power products, imports half of its polysilicon materials mainly from the US and EU for assembling solar cells and panels that are then re-exported to these markets.
The average price of polysilicon reached 136,163 yuan ($21,962) per ton Monday, up 16 percent from mid-December, according to data from market intelligence agency Sunsirs China Commodity Data Group.
The higher price means that polysilicon producers can break even and even make a slight profit of 1 to 2 percent, Zhang Ming, a market analyst with Sunsirs, told the Global Times Monday.
"Many polysilicon manufacturers have gone bankrupt and only one out of 10 producers maintained production last year due to overcapacity issues," Zhang said.
China has allowed the connection of photovoltaic solar power producers to the State grid and has launched policies to boost domestic demand for solar power, which also contributed to the recovery of upstream raw materials, he said.
The price of solar panel products has also increased slightly to $0.7 per unit from a record low of $0.6 last year, Meng Xian'gan, deputy director of the China Renewable Energy Society, told the Global Times Monday.
However, it is too early to say that the slowdown in the sector has bottomed out, Meng said.