Polysilicon output cut expectations drive bullish sentiment as downstream players actively stockpile
Supply & Inventory: Recently, polysilicon inventories have already reached a high level of around 400,000 tons, and September production plans of polysilicon producers show a slight month-on-month increase. However, the market focus has shifted to the outlook. Industry consensus is building that the dry season in October will force significant production cuts in polysilicon segment in Sichuan and Yunnan, leading to a sharp decline in future polysilicon supply. Inventories will then see a depletion phase, thus effectively easing the current oversupply in the polysilicon sector.
Demand: Amid fears of further price hikes and supply shortages, ingot manufacturers are shifting from passive procurement to active stocking. Some companies are increasing purchases proactively to hedge against the risk of higher costs ahead.
Price outlook: Polysilicon prices have already risen noticeably on the back of stronger downstream demand. Looking ahead, the main drivers of the higher polysilicon prices are anticipated supply cuts and policy interventions, with downstream stockpiling accelerating the trend. Specifically, the market logic on the polysilicon outlook has shifted from focusing on “current inventory” to betting on “future shortages.” Until output reductions materialize in Q4, bullish sentiment is expected to keep polysilicon prices on an upward trajectory. Still, the scale of actual production cuts and downstream tolerance to the price increase remain key factors to watch.
Wafer Prices Hold Firm; 183N Wafers Poised for Price Increase Due to Tight Supply
Supply & Inventory: Under the trend of destocking by increasing the prices, wafer makers have seen margins recover and operating rates increase. Strong demand for wafers has effectively digested previous wafer inventories, bringing inventories down to around 16 GW, a relatively healthy level.
Demand: Wafer demand is underpinned by two forces: Continuous ramp-up in cell production results in rigid demand for wafers. Preemptive procurement by cell makers concerned about rising upstream costs, amplifying short-term market heat.
Price outlook: Firm polysilicon prices—backed by the anti-irrational price competition policy—continue to support wafer costs. In the near term, as long as upstream price stabilization measures hold, wafers are expected to remain in a stable price structure. That said, the 183N format shows higher likelihood of price increases due to persistent supply constraints due to tight supply.
Solar cell prices remain resilient, but the increase rate constrained by downstream sectors.
Supply & Inventory: Driven by strong demand, overall solar cell inventories are trending lower. Specialized cell manufacturers are maintaining a healthy level of under 5 days. However, supply–demand dynamics vary across formats:183N cells are benefiting from strong overseas demand, leading to short-term supply–demand mismatches and upward price support. 210N cells remain relatively balanced with smooth price transmission. 210R cells continue to face oversupply and heavy pressure, with little upward momentum.
Demand: Cell demand enjoys dual support. On the one hand, module makers, expecting further price increases along the supply chain, are attempting to active procurement to hedge future cost risks. On the other hand, September’s module production plans show that market demand remains intact despite rising prices, underscoring stable and firm prices.
Price outlook: Cell prices will stay firm in the short term, supported by costs and low inventories, and are likely to track upstream increases. However, as a midstream link, their upside is constrained by two factors: The cost tolerance of module makers, and the chance to pass on higher prices to the market. Thus, cell price gains are expected to be more moderate and cautious compared with upstream. As for formats, 183N and 210N cells are set for smoother price increases, while 210R remains under pressure.
Module prices shift upward; Q4 market outlook remains optimistic
The market focus for PV modules has moved up to the RMB 0.66–0.68/W range, with short-term sentiment leaning positive.
Demand: Driven by concerns over rising upstream costs, module makers remain proactive in procurement and can still absorb current cell prices. September’s production plans show higher output than August, indicating robust market demand.
Supply & Prices: Q4, as the traditional peak season, coupled with supportive anti-irrational price competition policies, is seeing the bullish consensus. While both costs and demand provide a solid price floor, sharp increases in module prices are still limited by market acceptance to high prices. However, it is less likely to see price reduction in modules. That said, module prices are unlikely to drop and are expected to remain firm at elevated levels.
