[SMM analysis] Polysilicon inventory exceeded 100,000 tons, order signing price expected to fall this week

Recently, the increase in cost pressure has led to a significant decrease in the purchase of polysilicon, especially N-type polysilicons, by downstream crystal pullers. This has been followed by a significant increase in polysilicon inventory and market expectations over price declines for this round of polysilicon orders signing.

According to SMM, as of last weekend, the polysilicon inventory of domestic polysilicon manufacturers exceeded the 100,000 tons mark. Some companies' own inventories have even reached around 20,000 tons, and the proportion of N-type polysilicons has increased significantly. As the proportion of downstream purchases for cauliflower materials and granular silicon increases, the N-type market has significantly cooled down. According to SMM, the proportion of granular silicon used in some crystal pulling plants in raw materials has reached about 40%.

With the increasing cost pressure on crystal pulling plants and the increase in polysilicon inventory, signing prices of this round of contracts are expected to drop again - since last week, some second- and third-tier polysilicon plants offered a low price of 68 yuan/kg. This week, SMM learned that some crystal pulling plants expect the price to be as low as 65 yuan/kg. But there were no quotations and no transactions.

SMM believes that some polysilicon plants are facing greater inventory pressure, and there is a possibility of a sharp decline in polysilicon prices in this round of order signing. At the same time, in Q2 of 2024, key production capacities such as Yongxiang Yunnan Phase II, Daqo Inner Mongolia Phase II, and East Hope Ningxia will be put into production, which will have a certain negative impact on the polysilicon market.