The preliminary self-discipline plan for the four main materials in 2025 has been set! What are the expectations for their scheduled production in December? [SMM Analysis]

Since October, the PV industry has frequently held self-discipline meetings. Major market participants have been continuously discussing self-discipline and cut-throat competition issues, proposing solutions such as capacity exit based on energy consumption control, quota restrictions, and supply chain systems. All parties are trying to find an effective self-discipline plan to help the PV industry quickly emerge from the "winter."

Last week and earlier this week, the industry held another self-discipline meeting on wafers, followed by market rumors about the fixed production quota for 2025. SMM also received related rumors about production reduction quotas.

SMM verified with multiple companies that such information is often mixed with truth and falsehood—the direction of the quota plan is indeed initially set, but the given values are not final. Meanwhile, SMM learned that relevant associations and enterprises have preliminarily drafted self-discipline plans for 2025, not only for wafers but also from polysilicon to modules. Relevant leaders are currently visiting enterprises.

According to SMM, preliminary plans have been set for the four major segments, mostly related to last year's shipments and current year's capacity, but the coefficients for each segment are different and may vary significantly. So, what are the plans for each segment? Will December production be affected? Increase or decrease in production?

Polysilicon: According to SMM, compared to other segments, the pace of agreement on polysilicon is relatively slow. It is currently tentatively set as last year's shipments * coefficient A + current year's production * coefficient B. At present, the shipment proportion coefficient is also relatively small. The latest domestic polysilicon production schedule for December is expected to be 94,600 mt, down 15.2% MoM from November. Top-tier enterprises contribute to the main production reduction.

Wafers: According to SMM, the overall steps for the 2025 production quota for wafers are relatively "better" compared to other segments. It also adopts the model of multiplying last year's shipments and current year's capacity by different coefficients. Compared to previous meetings, the coefficients A and B for wafers were adjusted this week (reducing the shipment proportion). For wafers, the capacity coefficient may be affected by the type of furnace, with older furnace types like 1,200 possibly being at a disadvantage in the coefficient. According to SMM data, domestic wafer production in December is 40.3 GW, up 4.77% MoM from November. Three to four first- and second-tier enterprises have slightly increased production.

Solar cells: It is reported that top-tier battery enterprises have successively signed relevant agreements, stipulating a total annual production limit for solar cells in 2025. Relevant battery enterprises determine their quotas based on their total shipments and latest production capacity for 2024, i.e., ((weight*battery shipments of a certain enterprise/total battery shipments in the market) + (weight*battery production capacity of a certain enterprise/total battery production capacity in the market)) * annual limit. Currently, the supply-demand imbalance in the solar cell segment is significant. China's total solar cell capacity exceeds 1,000 GW, with annual demand exceeding 610 GW in 2024, and the domestic operating rate of producers is only about 60%. December global cell scheduled production is expected to be around 50 GW, with little change from the previous month.

Modules: The module segment plans to use the formula "enterprise shipments x coefficient." In H2 this year, the operating rate of modules has already been controlled and adjusted downward. During the procurement peak in October-November, module production increased slightly. As the year-end concentrated delivery period is about to end, some enterprises plan to reduce their operating rates and produce only as needed. December module scheduled production is expected to decrease by 7-8% MoM.