May 29 (Bloomberg) -- The price of polysilicon, the raw material used to make most solar panels, rose 1.3 percent last week, the first increase since February, according to Bloomberg New Energy Finance.
The material’s average spot price was $23.20 a kilogram compared with $22.90 a week earlier, a survey by the London-based research group showed today. Polysilicon tumbled 62 percent in the past year on oversupply issues and is down from a February 2008 peak of $475.
The shares of polysilicon companies rose. MEMC Electronic Materials Inc., the second-largest U.S. producer, climbed 6.3 percent to $1.69 at 11:16 a.m. in New York. China’s GCL-Poly Energy Holdings Ltd. gained 5.8 percent and Norway’s Renewable Energy Corp. ASA increased 3.6 percent.
Polysilicon probably won’t hold onto the gain, Mehdi Hosseini, an analyst at Susquehanna Financial Group LLLP in San Francisco, said today in an interview.
“I don’t see any reason for prices to trend upward,” Hosseini said. “Until companies start going bankrupt and capacity coming off line, we’re not going to see a healthy solar industry.”
The modest gain doesn’t “alter the fundamental dynamics of excess capacity coming in,” said Hari Chandra Polavarapu, an analyst at Auriga USA LLC in New York. “People have to get used to the reality of polysilicon oscillating between $20 and $25 a kilogram.”
To contact the reporter on this story: Ehren Goossens in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Reed Landberg at email@example.com