Polysilicon scheduled production decreased by 17% MoM in June. Will polysilicon prices hit the bottom?

According to SMM data, domestic polysilicon scheduled production in June will significantly decrease to around 146,000 mt, down approximately 17.5% MoM from the actual production in May. In fact, the actual scheduled production in May of 177,000 mt was also about 5,000 mt less than previously expected.

Meanwhile, the recent inventory pressure on polysilicon has also eased, with some leading manufacturers seeing slight reductions in their inventories. Have polysilicon prices hit the bottom? From the price trend chart, it shows that the decline in polysilicon prices has significantly slowed down over the past half month, especially in the past week, where polysilicon prices have almost stabilized.

One of the main reasons for all this is the recent frequent production cuts by polysilicon manufacturers. According to SMM, as of June 7, four out of the top five polysilicon producers have undergone production cuts and maintenance to varying degrees. It is conservatively estimated that more than five second- and third-tier companies have also reduced production, with two well-known companies planning to completely halt production in June. The production cuts in polysilicon have not only eased the inventory pressure on companies but also alleviated market sentiment to some extent. SMM believes that the current recovery in market sentiment has a significant impact on prices. Downstream purchasing confidence has somewhat recovered, with a noticeable increase in the frequency of purchases and inquiries recently. Some traders and manufacturers have made small-scale restocking, leading to a short-term inventory reduction, which in turn has stabilized prices.

SMM believes that with the deepening of polysilicon production cuts and cost support, despite certain inventory pressure on polysilicon manufacturers, prices may bottom out in early Q3.

However, it should be noted that according to polysilicon and silicon wafer scheduled production in June, polysilicon remains in a state of oversupply. After the price rebound, the operating rate is likely to rebound, which may result in weak price increases. Therefore, the rebound is expected to be limited.