Cost Support Weakens, Downward Price Pressure Persists Across the Solar PV Supply Chain

Polysilicon

The polysilicon market remains in a weak oscillation, with persistent oversupply pressure on supply-demand relationship. Industry inventory levels remain elevated above 520,000 MT. Although expectations around "anti-involution" policies have sparked some price-support sentiment, supply-demand imbalances continue to dominate the market.

This week, downstream ingot manufacturers have adopted a strong wait-and-see stance, with transactions nearly at a standstill; mono recharge polysilicon prices have fallen to CNY 33/kg. The primary drivers are: a significant month-on-month increase in June production volumes due to capacity restarts and expansions at Tongwei, GCL, Xinte Energy, and Asia Silicon. At the same time, subdued industry expectations for H2 solar installation activity, which—combined with heavy inventory burdens—has incentivized producers to move stock at lower prices. Polysilicon prices will remain under pressure in the near term; close attention should be paid to the progress of anti-involution policy implementation.

Wafers

The wafer market faces a dual bind of elevated inventory and sluggish shipments. Industry-wide inventory remains above 28 GW, with prices pressing against the cost floor. Against this backdrop, market strategies are diverging: Tier-1 leading manufacturers are attempting to hold the line on prices, while tier-2 and tier-3 players—squeezed by liquidity and inventory pressure—are offering modest discounts to sell their products.

The core issue is that the wafer segment continues to run at high utilization rates despite bloated inventories, intensifying destocking pressure. With the entire supply chain in a downswing, negative feedback effects between upstream and downstream are pronounced, and wafer prices are expected to remain weak in the near term.

Cells

The cell market continues its downward trajectory, with near-term downside risks intact. Industry inventory sits at approximately 11 days of supply, sustaining inventory pressure and shipment difficulties. This latest price decline reflects a convergence of multiple factors: first, leading cel manufacturer Tongwei significantly ramped production this month, adding meaningful incremental supply and exacerbating the supply-demand imbalance. Second, a decline in silver prices has eroded cost support, prompting traders to liquidate positions. Third, a broad-based supply chain downturn has weakened market confidence, making it difficult to reverse the cell price downtrend.

By format, 183mm cells face elevated downside risk due to a sharp drop in Indian demand combined with concentrated inventory offloading by major manufacturers; 210R cells carry high inventory levels and face equally significant price pressure; 210mm cells, supported by utility-scale solar project demand, are outperforming the other two formats overall.

Modules

With the supply chain in broad decline and market demand continuing to fall short of expectations, the module segment is under deep pressure. Current procurement activity is dominated by low-cost sourcing, with the market running primarily on firm demand restocking and deliveries against previously awarded contracts.

As upstream cell prices fall rapidly, the cost floor underpinning module pricing has collapsed, and module prices are following suit. Tier-1 manufacturers are now quoting predominantly at CNY 0.71–0.73/W, while tier-2 and tier-3 suppliers have broadly fallen below CNY 0.70/W, with the low end of the range reaching CNY 0.67–0.69/W.

Caught in a sustained price decline, downstream buyers have adopted a cautious, wait-and-see posture, deferring procurement where possible. In the near term, module prices will continue to track upstream price declines and remain under pressure.