This week, the polysilicon market has shown signs of recovery. Although most companies did not secure a large number of new orders, some previously postponed contracts were renegotiated and executed at higher-than-expected prices. Additionally, a few companies managed to close small-volume deals at slightly increased prices. As a result, the average market price of polysilicon experienced a slight upward trend this week.
There are three main reasons behind the recent price uptick:
Stable Supply Matching Demand: Monthly polysilicon output has remained relatively stable at around 100,000 tons, aligning well with downstream demand and avoiding additional inventory buildup.
Supportive Government Policies: The government has taken multiple measures to promote supply-side structural reform, encourage the formation of an “industry community of shared destiny,” and strictly curb cutthroat competition involving below-cost pricing. These efforts have improved market sentiment.
Cost Pressure and Industry Consolidation: Since mid-May 2024, the average price of polysilicon dropped to RMB 38,000/ton, remaining below the industry's average production cost for over a year. Four companies halted production in the first half of 2024, with a total of nine shutdowns since the beginning of the year. Facing prolonged losses, a combination of positive market signals and easing supply-demand pressure has led to a cautious, rational price rebound this week.
As of this week, the number of domestic polysilicon producers in operation has dropped to nine, with two more companies suspending production and maintenance in July, and no clear restart schedule in place. According to the Silicon Industry Branch, China's polysilicon output in June was about 102,000 tons, roughly flat month-on-month and well aligned with demand, resulting in no additional inventory buildup. Cumulative domestic output for the first half of 2025 reached approximately 596,000 tons, marking a sharp 44.1% year-on-year decline.
Based on production schedules and operation plans, July’s output is expected to range between 103,000 and 110,000 tons. The modest increase will come from partial restarts at facilities in Sichuan, Xinjiang, and Qinghai, while the decrease will stem from the gradual cessation of production at the two newly idled companies.
According to 2025 global installation forecasts, total global polysilicon demand is estimated at 1.4 million tons (excluding inventory across the value chain), with domestic demand around 1.3 million tons. If no additional capacity is restarted, total annual output is expected to reach around 1.2 million tons, leaving room for the absorption of about 100,000 tons of existing inventory in the second half of the year. However, if production restarts materialize, total output could exceed expectations by about 8%, intensifying supply-demand pressure once again.
In the face of the current severe imbalance across the entire solar value chain, the top priority is to strictly control new production capacity. Additionally, companies with advantages in energy consumption and product quality, along with national standards for energy and quality performance, must help accelerate the phase-out of outdated capacity. Only then can the fundamental supply-demand imbalance be resolved and prices across the crystalline silicon PV industry chain return to rational levels.
Source：https://mp.weixin.qq.com/s/Ma7_8XHimPYah-UhGDJy5Q
