| With great challenges of rising energy prices, escalating global warming and slow deployment of renewable energy technologies, solar energy stepped into utility-scale of applications in the early2000s across the globe and would definitely make great impacts on the world energy structures, environmental regulations, renewable energy applications and energy trades. Solar photovoltaic (PV) silicon feedstock, as the most important upstream material of solar photovoltaic technology, saw dramatic market supply and demand growth and historical price fluctuations. The great changes in PV silicon feedstock markets brought chances to China PV enterprises and weakened trade relations of original PV leading countries. It is very necessary to make an intensive study of PV silicon feedstock international pricing mechanism for the exploration of its price determination, fluctuation and transmission, for the promotion of healthy developments of China solar photovoltaic industry and for the guidance effects of strategic new industries in national economy growth.Studies in literature are mainly based on statistic analysis, lack of theocratic and empirical basis. This paper applies transaction cost theory, producer theory, game theory and spatial space theory for theoretical analysis, and adopts pricing decision model, price shock model and space price transmission model to systematically study the international price formation, fluctuation and transmission of PV silicon feedstock. The main contents are as follows. First, based on the global market situations of PV silicon feedstock, a review is made on types of PV silicon feedstock price formation, features of price fluctuations and main forces that drive supply and demand changes. Second, based on an intensive analysis of contract arrangements, theoretical models are established for PV silicon feedstock pricing mechanism and models are extended for the presence of market power, market shocks and market integration. Third, econometrical tests are made on structural vector autoregressive (SVAR) model and spatial price transmission model to verify the international pricing mechanism of PV silicon feedstock.Main conclusions are as follows. First, based on features of production technology, market structure and transaction forms, the PV silicon feedstock pricing mechanisms are classified as negotiation pricing mechanism in contract trades and market pricing mechanism in spot trades. In the basic pricing mechanism models, three types of micro-level players have differential contract and pricing choices under profit-maximum goals. The best choices for international traders are long-term market pricing contracts. PV cell producers in OEM trades are unaffected by silicon feedstock contract arrangements and pricing patterns. PV silicon feedstock producers’ choices are depending on the external market conditions and correspondent equilibrium prices are affected by oligopoly producers’ strategic behaviors. Under market shocks, PV silicon feedstock contract and spot prices response differently and the spot price adjusts more promptly than the contract price. Second, price shock effects of PV silicon feedstock are reflected in the timing and magnitude of price fluctuations under structure shocks in specific time spans. By empirical studies with data period of2004-2009, the structural decomposition of the real price of PV silicon feedstock is proposed and quantified under SVAR model:Euro-USD exchange rate shocks, production cost shocks, complementary energy demand shocks, aggregate demand shocks and demand shocks specific to silicon feedstock markets. The results effectively explain the differential price fluctuations of PV silicon feedstock in international contract and spot trades. Third, the role of spatial markets in PV Si feedstock price formation is reflected in the effectiveness of cross-border price transmission. By China import data by country and trade pattern, the spatial price transmission models of PV silicon feedstock are established among world leading four PV silicon feedstock markets. The results show that USA market is leading prices of both contract and spot trades, DEU and SK are leading prices of contract and spot trades separately. Even there is a large trade flow among cross-border contract markets, the PV Si feedstock price transmissions are not effectively enough. The spot markets are more significantly related within market rather than among markets. USA is the only market where it is possible that contract and spot prices are causally related.The paper creativity is reflected in the following three aspects. First, the analytical framework for PV silicon feedstock international pricing mechanism is established with supports of transaction cost theory, game theory and international trade theory. Second, the first-hand materials of trade and production arrangements through extensive surveys provide a solid practical basis for theoretically study of PV silicon feedstock international pricing mechanism. Third, with hard work of data collection and procession, the econometric studies provide effective empirical evidence for the price shock and transmission in PV silicon feedstock markets. The empirical studies are helpful to arouse more exploratory studies for other researchers. |
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