The "anti-involution" in the photovoltaic industry continues to deepen, and polysilicon prices enter a downward adjustment phase

Reporter Yin Gaofeng

On March 4th, the China Nonferrous Metals Industry Association Silicon Branch (hereinafter referred to as “Silicon Branch”) released the latest weekly polysilicon price data. The data shows that this week, the transaction price range for N-type polycrystalline silicon re-investment material is between 45,000 RMB/ton and 53,000 RMB/ton, with an average transaction price of 48,300 RMB/ton, down 6.58% week-on-week; the transaction price range for N-type granular silicon is between 43,000 RMB/ton and 45,000 RMB/ton, with an average of 44,000 RMB/ton, down 12.87% week-on-week.

The Silicon Branch stated that the main reason for the sharp decline in prices is: on one hand, post-holiday terminal installation projects are starting slowly, and the utilization rate of downstream modules and cells has not recovered as expected, resulting in demand not effectively transmitting upward, and the actual digestion capacity of silicon materials remains weak; on the other hand, social inventory of polycrystalline silicon has been accumulating positively for seven consecutive months, reaching a high of 480,000 tons by the end of February.

According to the Silicon Branch, in February, domestic polysilicon production was approximately 84,400 tons, a significant decrease of 17.3% month-on-month. Despite some leading companies halting production for maintenance, which constrained supply, there was also small-scale resumption of previously reduced capacity, partially offsetting the overall supply contraction. It is expected that the total polysilicon output in March will be between 87,000 and 89,000 tons.

The Silicon Branch said that from the supply side, the support for market prices has weakened. The utilization rate of downstream silicon wafer segments remains low, with no large-scale inventory buildup motivation, and demand also struggles to support upward price movement. Overall, weak demand and high inventory pressure will be the main factors influencing the market trend in March. The post-holiday demand recovery is slower than previous market expectations, and the industry’s extremely high inventory levels need to be digested.

The Silicon Branch believes that in the short term, without unexpected policy stimuli or a strong rebound in demand, the polysilicon market is expected to enter a downward adjustment phase.

“The current polysilicon market is facing dual pressures of weak demand and historically high inventories, and prices have entered a downward adjustment phase. Although the ‘anti-involution’ policy provides a bottom support for prices, there is still room for short-term decline before supply and demand reach a new balance,” said Qu Fang, an investment advisor at Wanlian Securities, in an interview with Securities Daily. He noted that polysilicon is currently in a phase of “short-term pain” and “long-term restructuring.” While recent price drops are directly caused by supply-demand imbalance, the “anti-involution” policy is setting a new framework for the industry’s long-term development.

Currently, the “anti-involution” campaign in the photovoltaic industry is deepening. The Ministry of Industry and Information Technology emphasized at a photovoltaic industry entrepreneurs’ symposium at the end of January that, under the current situation, “anti-involution” is the main contradiction in the regulation and governance of the photovoltaic industry. Various departments should strengthen coordination, work together, and use measures such as capacity regulation, standard guidance, quality supervision, price enforcement, anti-monopoly risk prevention, intellectual property protection, and technological advancement to promote the industry back to a healthy, rational development track through market-based and rule-of-law approaches.

“Top-level guidance of ‘rule of law and market orientation’ means that future ‘anti-involution’ will be driven by legal and regulatory means, using market mechanisms to clear excess capacity,” Qu Fang said. He believes that as the “anti-involution” effort continues to deepen, leading companies with advantages in technology, product innovation, and cost control will be the first to break through, while outdated, high-energy-consuming capacities will be accelerated for clearance.

Zhong Baosheng, Chairman and General Manager of Longi Green Energy Technology Co., Ltd., told Securities Daily that the core of innovation in the polysilicon segment lies in cost reduction and energy consumption reduction. He suggested that “energy consumption” and “environmental protection” could be used as leverage to set and dynamically improve limits on unit product energy consumption and pollutant emissions standards. Companies that fail to meet standards should be required to upgrade within a deadline, and those that do not improve should be eliminated.

“The company always adheres to a long-term development philosophy, actively resists low-price dumping and irrational expansion, and continuously improves core competitiveness through technological iteration and cost reduction,” said a relevant person in charge of GCL Technology Holdings Ltd. to Securities Daily. Thanks to continuous optimization and improvement of capacity scale and production processes, the company’s granular silicon production bases have consistently lowered costs. Additionally, the low-carbon production advantage of granular silicon has broken the traditional high-energy consumption perception of polysilicon and will gain resource tilt in the future global low-carbon trade system.

(Edited by Shangguan Menglu)

(Edited by Wen Jing)

Keywords: Polysilicon Photovoltaic