Polysilicon Prices Stabilize and Rebound? Multiple Companies Respond: In the Destocking Phase, Resuming Production Based on Market Conditions

After a prolonged and turbulent industry cycle, PV industry chain prices, after continuous declines, seem to have finally seen a glimmer of hope. Recently, the polysilicon segment has shown multiple positive signals, with production schedules gradually optimized and market quotations stabilizing and rebounding.

On January 15, the PV sector strengthened against the trend, with Flat Glass hitting the daily limit, and several stocks such as Haitai New Energy, Shuangliang Eco-Energy, and Jinggong PV rising over 5%. Polysilicon producers Tongwei Co., Ltd. and Daqo New Energy rose over 3%.

As early as December 2024, 33 PV enterprises, including leading polysilicon producers, signed an industry "self-discipline convention" to prevent "cut-throat" competition. Subsequently, leading polysilicon producers such as Tongwei Co., Ltd. and Daqo New Energy announced production cuts and maintenance.

Multiple sources indicate that the polysilicon segment seems to show significant signs of breaking away from the previous downward trend. Facing the continued downward pressure on market prices, polysilicon producers are taking a series of measures, such as adjusting production rhythms, to support polysilicon prices and avoid excessive profit erosion. So, what is the future trend of polysilicon prices? At what stage are the polysilicon producers currently? When is production expected to resume? These questions have become hot topics in the industry recently.

Polysilicon Enterprises Respond: In the Destocking Phase, Resumption Depends on Market Conditions

Recently, market news suggested that several polysilicon producers might resume production or return to normal production rhythms after the end of Q1 this year. Polysilicon prices are expected to strengthen throughout this quarter, providing some support for downstream PV prices.

Regarding industry prices, inventory, and production conditions, a reporter from "Sci-Tech Innovation Board Daily" called several polysilicon producers as an investor.

Regarding the current inventory situation and operating rhythm, a representative from Daqo New Energy's securities department told the reporter that polysilicon prices have indeed risen slightly, but the specific operating rhythm depends on subsequent market supply and demand conditions. "The company is still in the destocking phase, but inventory remains, and there are no clear signs of improvement yet."

A representative from Tongwei Co., Ltd.'s securities department similarly told the reporter, "The specific production schedule depends on market conditions, and production will be arranged based on the optimal economic situation. Currently, we are in the destocking phase." However, the representative mentioned, "Technical personnel responsible for equipment maintenance during the shutdown will further improve efficiency for the next production resumption."

A representative from Hoshine Silicon Industry's securities department told the reporter that the company is involved in segments such as modules, silicon wafers, and solar cells, with polysilicon primarily for internal use and limited external sales. "The company will dynamically assess industry changes and adjust based on its production rhythm."

It is reported that Hoshine Silicon Industry's integrated entire industry chain PV park was fully operational by year-end 2023, and polysilicon-related products were sold externally starting Q1 2024. However, as subsequent product prices fell below industry production costs, the company's polysilicon products were primarily for internal use starting Q3 2024, with no external sales.

"As of Q4 2024, most products were still primarily for internal use. Currently, a polysilicon production line in central Xinjiang is undergoing shutdown and maintenance. As for when production will resume, it depends on the maintenance schedule," the representative stated.

Discussing future polysilicon prices and capacity digestion trends, the aforementioned Hoshine Silicon Industry representative stated, "With significant new polysilicon capacity added in 2023 and 2024, based on the industry's current inventory and operating rate, it will still take some time to digest."

A representative from Daqo New Energy's securities department told the reporter, "The company's future polysilicon prices are estimated to rise, but the specific timing is unclear, as prices are mainly influenced by the supply-demand relationship."

Tongwei Co., Ltd. believes that due to multiple influencing factors, the trend for 2025 is difficult to predict. "The company believes demand will continue to grow, as the transition to new energy is a major trend."

Regarding overseas business, a representative from Tongwei Co., Ltd.'s securities department mentioned that its overseas business is progressing steadily and rapidly. Daqo New Energy stated that its business is primarily domestic, with only a small portion of sales overseas.

Polysilicon Production in January 2025 Expected to Be Below 100,000 mt

As of now, all polysilicon producers in China are operating at reduced loads. According to the Silicon Industry Association, China's polysilicon production in December 2024 was 103,800 mt, down 22.10% MoM. Based on production schedules, January 2025 polysilicon output is expected to be around 98,000 mt, down approximately 5% MoM.

Regarding the overall industry production forecast, Lu Jinbiao, Joint Secretary General of SEMI China PV Standards Committee, recently told the reporter from "Sci-Tech Innovation Board Daily," "In December, the polysilicon industry's load was below 50%, with monthly production capacity at 103,800 mt. Inventory digestion has begun, and January 2025 production is expected to be below 100,000 mt."

"In terms of prices, with reduced supply, downstream players have started stockpiling for the new year's production before year-end, and market prices are expected to rebound above cost lines. " Lu further added.

From the transaction perspective, polysilicon enterprises saw some trading volume over the past week, mainly concentrated among leading producers, while other enterprises primarily dealt with small orders, remaining in a stalemate with upstream and downstream players. According to the Silicon Industry Association of the China Nonferrous Metals Industry Association, this week, six enterprises traded n-type polysilicon, with transaction prices generally trending upward. A few orders reached a high price of 45,000 yuan/mt.

The Silicon Industry Association believes that the current momentum for polysilicon price increases is insufficient, with low acceptance levels. Only a few enterprises successfully raised order signing prices, and this does not represent an overall industry price recovery. "Previously, downstream enterprises stockpiled enough polysilicon inventory for production in January-February, and the procurement prices during the earlier stockpiling phase were relatively low, mostly at or below 40,000 yuan/mt. Currently, with the rapid price increases in polysilicon, downstream players still need time to adapt."

Overall, polysilicon inventory has shifted from upstream to downstream, but the stockpile remains significant, and polysilicon price recovery will require a period of inventory digestion.

Guotai Junan Futures mentioned in its latest research report that polysilicon prices in 2025 are expected to show a "rise first, then fall" trend. In Q1 2025, due to reduced inventory and demand boost, prices are expected to stabilize. However, entering Q2, with further inventory reduction and increased demand, prices are likely to rise. By Q3, as the south-west China region enters the rainy season again, electricity price advantages will drive higher operating rates among local polysilicon enterprises, leading to increased polysilicon supply and exerting downward pressure on prices. In Q4, prices are expected to continue facing downward pressure.