Why the polysilicon price has been cemented and can’t rise soon

The huge inventory mountain piled up by Chinese polysilicon manufacturers in 2024 is hardly carried off. This is why the polysilicon price has not risen despite a price rally downstream.

Chinese wafer producers have begun to sign polysilicon orders for April, but the transaction volume was low this week. Although they have reduced their polysilicon inventories in recent weeks, wafer makers still have plenty of raw material in store.

At the same time, the inventories of polysilicon manufacturers have increased, according to the Silicon Branch of the China Nonferrous Metals Industry Association. Several sources estimate the current volume at 250,000 to 260,000 metric tons (MT), whereas the total polysilicon inventory in the supply chain, including wafer producers and traders, is still close to 400,000 MT.

Since China’s monthly polysilicon output of somewhat less than 100,000 MT is basically not lower than consumption, the inventory mountain piled up in 2024 is hardly carried off. This is why the polysilicon price has remained unchanged since early January, despite the downstream price surge that has been induced by the spring installation rally in China.

Data from InfoLink shows that the prices of rectangular n-type wafers, TOPCon solar cells and modules for distributed PV plants in China have risen by 11.5%, 21.4% and 10.1%, respectively, since mid-February. However, InfoLink expects module prices to peak soon as the increase is already slowing down.

Moreover, new polysilicon production capacities in China are slated to come on stream in the second quarter. That is making a significant – if any – rise of the polysilicon price more and more unlikely in the coming weeks and months.

Thus, the average price of Chinese polysilicon for n-type ingots remains at CNY40.5/kg (including 13% value added tax, equivalent to US$4.94/kg without VAT). Our assumption for the price of p-type material stays at CNY33.5/kg (US$4.08/kg without VAT). After the decline last week, the index of InfoLink for non-Chinese polysilicon has settled at US$20/kg. The global price average declined slightly by 0.3% to US$5.65/kg, due to a weakening Chinese yuan.