SHANGHAI, Dec 29 (SMM) - The output of polysilicon stood at around 98,300 mt in December, up 5.59% on the month, exacerbating the situation of oversupply, according to SMM statistics.
As for the reasons behind the continued production growth, considerable profit of around 140-150 yuan/kg based on the sales price of 200 yuan/kg among top-tier polysilicon manufacturers is among the major driving forces. Coupled with some new capacities ramping up the production, the overall polysilicon has kept mounting. However, due to the deteriorating pandemic situation in China in December, some workers were quarantined at home, leading to a shortage of labour forces, which hurt the normal production of manufacturers, especially those in Xinjiang and Inner Mongolia.
The increase in polysilicon supply in December has further weighed on the domestic polysilicon market. First of all, the operating rates of downstream silicon wafer companies kept falling amid sluggish terminal demand and lasting losses, and the silicon wafer output is estimated at 31 GW in December. The corresponding consumption of polysilicon came in at 81,000 mt, alluding palpably supply surplus of polysilicon. The same result can be concluded from the inventory held by polysilicon manufacturers. According to SMM statistics, the domestic polysilicon inventory has approached the 70,000-mt mark, and that of a leading manufacturers have exceeded 15,000 mt. Three top-tier manufacturers reported an inventory of more than 10,000 mt. As such, the polysilicon market is unlikely to improve in the near future.
Looking ahead, as the profit of polysilicon remains high at present, the manufacturers will be enthusiastic to produce. But considering the Chinese New Year holiday in January and repeating pandemic in China, the production of polysilicon will be affected to some extent. Coupled with the fact that no new production lines will be put into production in the foreseeable future, the domestic polysilicon output is expected to fall to around 94,000 mt in January 2023.
