Polysilicon price decline in 2023 vs. 2011 – an amazing parallel

The comparison between the polysilicon price developments in 2023 and 2011 is the most precise forecast Bernreuter Research has ever made. As it has turned out, the price dropped by 66% in both years.

In the comparison that we drew in June 2023, we analyzed the polysilicon price decline in 2011 as follows: It “shows some similarities to the situation in 2023. In both cases, the price initially rose in the first quarter before the downtrend set in.”

We also expected parallels for the second half of the year: “In 2011 the rapid price decline began to slow down in late May and was even followed by a short-term rebound in July. The current production cuts may curb the price decay as well. And once PV end demand explodes induced by low solar module prices, the polysilicon price might even recover temporarily.”

Exactly that happened – just a bit later in the year than in 2011. In the first week of July 2023, the global polysilicon price average reached its bottom at US$8.60/kg and began to increase again. Note, however, that we only predicted a temporary rise. And indeed, the price topped out at US$10.40/kg in mid-September. When delayed new production capacities came on stream amid seasonally abating demand, the price descended again.

The only major difference in 2023: The slump in the second quarter was deeper than in 2011, but was compensated for by a longer recovery in the third quarter and a slower slide in the fourth.

Rapidly sinking demand for p-type material will drag the price down further

Back in June we arrived at this conclusion: “Should the global polysilicon price average drop by 66% in 2023 as it did in 2011, it would land at approx. $7.75/kg by the end of this year; the price in China would likely continue to be about $1/kg lower and thus hover around the cash cost of the marginal producer.” The first part of our prediction couldn’t have been more precise: The global polysilicon price average came in at $7.72/kg at the end of December – a reduction of exactly 66.0% from $22.70/kg at the beginning of January. The extent of the price decline throughout 2011 was 65.9%.

Only the polysilicon price in China fared somewhat better than we assumed. The price of dense mono-grade polysilicon for p-type wafers declined to $7.06/kg in the last week of December. Nevertheless, we stick to our forecast in our new report, The Polysilicon Market Outlook 2027: In 2024 the polysilicon price in China will undercut the all-time low of $6.75/kg reached in June 2020.

At least, this will apply to Chinese polysilicon for p-type wafers, which already dropped to $6.81/kg (without value added tax) at the beginning of the new year. The rapidly rising demand for high-quality polysilicon used to make high-efficiency n-type solar cells will exacerbate the oversupply of conventional polysilicon for p-type cells. This makes it even more likely that only the leading Chinese polysilicon manufacturers that are able to produce n-type material will survive the coming shakeout.