High Inventories and Weak Demand Keep Solar Prices under Pressure; Short-term Market Likely to Continue Testing New Lows

Polysilicon

On the supply side, polysilicon inventory remains at a high level of over 520,000 metric tons, with destocking pressure still significant across the industry. Recently, leading polysilicon producers have increased low-price shipments, and part of the inventory is gradually being transferred downstream to ingot pulling makers. However, the overall supply-demand imbalance has not seen any great improvement. June polysilicon output is expected to increase by around 3000 tons month-on-month, further exacerbating surplus inventory pressure.

Recently, bulk transactions of dense mono polysilicon from leading producers have fallen to around RMB 32/kg, down RMB 1 to 2/kg from last week. Due to weak downstream demand, wafer producers remain cautious in procurement, with strong bargaining pressure on upstream suppliers. Under the dual pressure of high inventories and rising polysilicon supply, polysilicon prices are likely to remain on a downward trajectory in the near term.

Wafers

Wafer inventory remains at approximately 28 GW, with no meaningful relief in destocking pressure. Market trading sentiment remains sluggish, downstream purchasing demand is insufficient, and price negotiations are intensifying, with actual transaction prices still showing a decline of around RMB 0.01–0.02 per wafer. Notably, as competition intensifies in this segment, market differentiation is becoming increasingly pronounced, with the price gap between leading wafer manufacturers and second- and third-tier players continuing to widen.

With weakening polysilicon prices upstream, wafer cost support is also eroding. Combined with persistently high inventory levels, wafer prices continue to face downside risk in the near term.

Cells

Recently, solar cell inventory has shown a slight upward trend, with overall inventory days rising to around 10–11 days, indicating increasing destocking pressure. On the cost side, silver prices all over the world have fluctuated and gone downward, while wafer prices continue to decline. Consequently, cost support for solar cells is significantly weakening.

Under the combined pressure of inventory buildup and collapsing cost support, solar cell prices have generally fallen to around RMB 0.30/W. However, due to limited downstream demand, shipment resistance remains high in the cell sector and rapid destocking is still difficult. In the near term, fundamentals are unlikely to improve meaningfully, and cell prices are expected to remain in a low-level consolidation phase. Attention should continue to be paid to silver price fluctuations, which remain a key driver of non-silicon costs.

Modules

Module demand remains driven mainly by rigid procurement and delivery of previously awarded utility-scale solar projects, while incremental demand remains limited and overall market sentiment is cautious. At the same time, rapidly declining upstream cell prices are further weakening cost support for modules, pushing module prices into a new downward cycle.

Current leading manufacturers’ mainstream quotes have fallen to RMB 0.73–0.75/W, while second- and third-tier players are generally approaching RMB 0.70/W, with some low-priced orders even reaching around RMB 0.69/W.

Due to continued price weakness, downstream buyers are becoming increasingly cautious, and market trading activity is slowing. In the near term, module prices are expected to remain under pressure, following the downward trend of the upstream supply chain, while industry profitability re