PV Industry Chain: Upstream Inventory Overhang Weighs on Prices, While Downstream Cost Support Shows Signs of Recovery

Polysilicon

Supply:

Industry inventories remain at elevated levels, with total stockpiles exceeding 510,000 metric tons and still accumulating. As the marginal effects of industry-led inventory absorption platforms and self-discipline mechanisms fade, combined with already high internal inventories, polysilicon producers are facing mounting pressure to destock and increasing operational stress.

Demand:

The downstream wafer segment has taken the lead in initiating price cuts. Cost pressure is being transmitted upstream along the PV value chain, directly forcing polysilicon prices lower. Downstream buyers are showing reduced tolerance for high-priced polysilicon material.

Price Trend:

Market quotations are trending sharply downward, with some prices falling into the RMB 53–54/kg range (granular polysilicon roughly RMB 2/kg lower). There are even market rumors of extremely limited transaction prices slipping below pre-rally levels. In the short term, under the dual squeeze of supply and demand, downside risks to polysilicon prices are set to intensify further.

Wafers

Supply:

Wafer inventories remain high, exceeding 22 GW and continuing to build. Market divergence is becoming increasingly evident: while leading manufacturers are attempting to hold prices firm, Tier-2 and Tier-3 players have already begun cutting quotes under shipment pressure.

Demand:

Production cuts in the downstream cell segment have been far more aggressive than those in the wafer segment, exacerbating supply–demand mismatches. Weak downstream demand is unable to effectively absorb excess wafer capacity, further complicating destocking efforts for wafer producers.

Price Trend:

Current quotations from tier-2 and tier-3 manufacturers have fallen to approximately RMB 1.25/W for 183N, RMB 1.35/W for 210RN, and RMB 1.55/W for 210 N wafers. Under the combined pressure of inventory overhang, sluggish downstream demand, and weakening cost support from upstream polysilicon, wafer prices are likely to continue drifting lower in the near term, with a risk of retracing to pre-rally levels.

Cells

Supply:

Cell inventories remain relatively stable at around 6–8 days, indicating a broadly balanced inventory position. Supply-side contraction has been pronounced, with manufacturers implementing substantial production cuts. These cuts have become one of the key drivers behind recent price increases, effectively easing inventory pressure.

Demand:

Following the implementation of export tax rebate policies, overseas markets have seen a wave of short-term procurement activity. Strong restocking demand from downstream customers has provided solid demand-side support for price increases.

Price Trend:

Rising silver prices have significantly pushed up non-silicon costs. Although upstream wafer price declines have released some cost pressure, they are insufficient to offset the increase driven by silver. Transaction prices at major manufacturers have now climbed to RMB 0.41–0.43/W. In the short term, under the combined effects of cost pass-through and improving supply–demand fundamentals, cell prices are expected to remain on a passive upward trajectory, with firm support at elevated levels. Going forward, close attention should be paid to silver and polysilicon price movements.

PV Modules

Supply:

Driven by a notable increase in shipments, module inventories have declined rapidly, with destocking effects becoming clearly visible. Leading manufacturers have strengthened their pricing power and, supported by low inventory levels, continue to raise quotations, reflecting a strong willingness to defend prices on the supply side.

Demand:

The market shows a clear pattern of weak domestic demand and strong overseas demand. While domestic solar installations remain subdued, overseas markets have been buoyed by the implementation of export tax rebate policies, triggering strong enthusiasm for placing more orders. In conclusion, international demand has become the primary driver absorbing current production capacity.

Price Trend:

Spot market price benchmarks have moved higher. Transaction prices for tier-1 manufacturers have generally risen to RMB 0.80–0.85/W, while tier-2 and tier-3 players are pricing around RMB 0.78/W. In the short term, supported by rapid inventory drawdown and robust overseas demand, module prices remain well supported. Looking ahead, close monitoring is required on the pass-through of silver cost increases and the sustainability of overseas demand.