June polysilicon scheduled production will drop by 24%, have polysilicon prices bottomed out? [SMM Analysis]

According to SMM data, domestic polysilicon scheduled production in June will significantly decrease to around 136,000 mt, down approximately 24% MoM. May polysilicon production stood at 178,000 mt, 5,000 mt less than previously expected.

Meanwhile, polysilicon inventory pressure has eased recently, with some leading manufacturers seeing slight reductions in their inventories. Have polysilicon prices bottomed out?

From the price trend chart, it is not difficult to see 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 stopped the decline.

One of the main reasons is the frequent production cuts by polysilicon manufacturers recently. According to SMM, the top 5 polysilicon producers have all experienced varying degrees of production cuts and maintenance. Among them, two companies are expected to cut production by over 10,000 mt in June, and more than five second- and third-tier companies are conservatively estimated to have slashed production, with two well-known ones expected to completely halt production in June. These production cuts have not only eased inventory pressure on companies but also somewhat alleviated market sentiment. SMM believes that the current recovery in market sentiment has a significant impact on prices. Downstream procurement confidence somewhat recovered, with a noticeable increase in procurement and inquiry frequency recently. Several traders and manufacturers entered the market to purchase and even stockpiled, leading to a short-term inventory reduction, which in turn stabilised prices. Polysilicon inventory is expected to see a significant decline in the near future.

SMM believes that even though polysilicon manufacturers still face some pressure due to historical inventory, with the deepening of polysilicon production cuts and cost support, prices are expected to rebound amid concentrated procurement.

However, it should be noted that polysilicon oversupply persists based on polysilicon-silicon wafer scheduled production this month, and so does the entire industry capacity. After the prices rebound, the operating rate is likely to rise, leading to weak price increases. Therefore, the rebound is expected to be limited.