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Long-term silicon and wafer price contracts have found new, lower price levels for deliveries to 2015, according to the fifth issue of the New Energy Finance Silicon and Wafer Price Index, published in November 2009.

Public disputes over silicon contracts, such as those between Q-Cells and LDK, and REC Wafers and China Sunergy, have highlighted the counterparty tensions over fixed-price, 5-10 year contracts for commodities that have seen their prices on the spot market plunge. Some contracts already have forward prices below the current spot price, to the continued satisfaction of the buyers, but many are in renegotiation or have already been renegotiated downwards.

The fifth issue of the Survey finds that the weighted average price of polysilicon for delivery in 2009 – including contracts negotiated in previous years - is $78/kg. This compares to a spot price for October according to New Energy Finance’s monthly survey, of $65/kg. New contracts being signed or renegotiated in 2009, however, have a weighted average price for delivery this year of $69/kg; the contracts most at risk are those signed in 2008, which were on average priced higher than those signed in 2009 for silicon for delivery in every year until 2012. The price by year for deliveries in 2010-15 remains between $55 and $75/kg.

Nearly all contracts for 6” multicrystalline silicon wafers are under renegotiation, as the average price for 2009 delivery under these contracts is $4.12/ piece, compared with an October spot price of $3.32/piece. Given that the median and average price in the sample is over $3.90/piece for each year 2009-15, renegotiation or cancellation is almost inevitable.

Some 5” monocrystalline silicon wafer contracts, on the other hand, are not under renegotiation, as they were signed at prices still comparable to today’s spot price of $2.11/piece. The median price of these contracts is $2.34/piece for 2009 delivery.

New Energy Finance expects further industry news of disputes over contract terms and down-payments, particularly over contracts signed in 2008. The reason is that increased silicon production capacity and decreased demand for photovoltaic modules from the Spanish market have caused the previous undersupply situation to become one of oversupply in 2009. However, the new terms of contracts signed in 2009 shows that in some places, mutual accommodations are being reached and partnerships preserved.


For further information about this press release, please contact:

Angus McCrone, Chief Editor, New Energy Finance
+44 207 092 8834
angus.mccrone@newenergyfinance.com

Ethan Zindler, Head of North American Research, New Energy Finance
+1 703 486 5667
ethan.zindler@newenergyfinance.com

Michael Liebreich, Chairman & CEO
New Energy Finance Limited
2nd Floor, New Penderel House
283-288 High Holborn
London WC1V England
tel: +44 20 7092 8800

ABOUT THE NEW ENERGY FINANCE SILICON AND WAFER PRICE INDEX:

The New Energy Finance Silicon and Wafer Price Index is a quarterly multi-client analysis of confidential data on silicon and wafer forward contracts. This report is based on data from over 20 volume buyers and sellers of silicon and wafers active in the solar industry. New Energy Finance Solar Insight subscribers receive a short-form report, while participants receive a longer, more detailed report at no cost.

More information about the index is available here: https://siliconindex.newenergyfinance.com/


ABOUT NEW ENERGY FINANCE:

New Energy Finance is the world’s leading independent provider of subscription-based research to decision-makers in renewable energy, carbon markets, energy efficiency, biofuels, carbon capture and storage, and nuclear power. The company has a staff of more than 130, based in London, Washington DC, New York, Palo Alto, Beijing, Shanghai, New Delhi, Hyderabad, Cape Town, São Paulo, Sydney and Perth.

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