Recently, polysilicon market prices have continued to weaken, with futures prices repeatedly hitting new lows since their launch, while spot prices have followed suit, leading the industry into a vicious cycle of “price cuts—inventory reduction—further price cuts.” Based on the latest market developments from March 22–23, the current weakness in polysilicon prices is not merely a short-term fluctuation but rather the result of multiple converging factors, including oversupply, weak demand, high inventory levels, diverging costs, the interplay between futures and spot markets, and macroeconomic policy constraints. The industry is entering a phase of deep adjustment and consolidation.
In terms of pricing, both the polysilicon futures and spot markets have weakened simultaneously, with the downward trend continuing to intensify. On March 19, the main polysilicon futures contract was the first to fall below the industry’s average cash cost threshold of RMB40,000 per ton, closing at RMB 38,550 per ton—a 5.77% decline—signaling that most companies have fallen into the red. As of the morning session on March 23, the main futures contract fell to a low of RMB 37,115 per ton and closed at RMB 38,021 per ton, setting a new record low since its listing and further amplifying panic in the spot market. The spot market was similarly weak and fragmented. The average price of N-type re-melted material stood at RMB 43,200 per ton, down 4.42% week-on-week, while the average price of N-type granular silicon was RMB 44,000 per ton. The spot price of P-type material was approximately RMB 36,000 per ton, a decrease of RMB 2,000 per ton week-on-week. Since the beginning of March, the price of re-melted material has fallen by more than 20% cumulatively, with the downward trend showing no signs of abating.
Severe oversupply and high inventory levels on the supply side are the core factors suppressing prices. Over the past three years, polysilicon production capacity has experienced explosive growth. As of the first quarter of 2026, global nominal capacity exceeded 3.5 million tons, while actual annual demand is only 1.35 million to 1.5 million tons, resulting in an industry surplus rate exceeding 100%. Regarding inventory, domestic social inventory reached a record high of 480,000 metric tons at the end of February. Current industry-wide inventory exceeds 520,000 metric tons—nearly six months’ worth of consumption—placing immense pressure on companies to ship products and manage cash flow. Although some companies reduced production by 17.3% in February, inventory drawdown has been slower than expected. This, combined with plans by some companies to resume and increase production from late March through April, is further exacerbating supply pressure. Furthermore, divergent corporate strategies have amplified the downward trend. Small and medium-sized manufacturers are actively cutting prices to sell off inventory and recover capital, while leading companies’ “dual-distribution” strategy—though alleviating their own inventory burdens—is conversely suppressing polysilicon prices.
Persistent weakness on the demand side has created a negative feedback loop throughout the supply chain. As a direct downstream product, the wafer sector has seen intense price competition since the Spring Festival, with prices for certain models falling by 20%–30%. Facing losses, wafer manufacturers have pressured upstream suppliers to lower polysilicon procurement prices, triggering panic-driven price cuts in the polysilicon market. Currently, wafer production capacity utilization stands at only 45%–50%, with procurement driven primarily by immediate needs and no willingness to proactively restock. Downstream cell and module manufacturers are exercising caution in procurement, with new orders scarce; end-user demand remains equally weak. Domestic ground-mounted power plant projects are launching slowly, while overseas, module export growth has slowed due to the conflict in the Middle East and rising shipping costs. Compounded by expectations of the cancellation of export tax rebates on April 1, rush exports are depleting future demand, further weakening the support for polysilicon demand.
Diverging cost structures and weakening cost support are driving prices lower and accelerating industry consolidation. The current industry-average cash cost is approximately RMB 40,000 per ton, while the spot price for P-type wafers has fallen to RMB 36,00 per ton and the futures price has dropped below RMB 38,000 per ton, leaving most companies operating at a loss. Companies in Xinjiang, leveraging the advantage of their own power plants, remain profitable at a cash cost of about RMB 32,000 per ton, whereas high-cost production capacity in other parts of the mainland faces a survival crisis, accelerating the exit of outdated capacity. Meanwhile, weak supply and demand for industrial silicon, coupled with falling prices, have further eroded cost support for polysilicon. Additionally, the new national energy consumption limit standards took full effect on March 1, and 610,000 tons of non-compliant capacity will be phased out by year-end; however, this is unlikely to alter the supply-demand imbalance in the short term. Expectations of the cancellation of export tax rebates on April 1 are further suppressing overseas demand and intensifying market wait-and-see sentiment.
Overall, the weakening of polysilicon prices is the result of multiple factors converging. The core contradiction of supply-demand imbalance is unlikely to ease in the short term, and the industry’s deep adjustment will continue. In the short term, prices are expected to remain weak as they test the bottom, with the key focus on the cost support level of RMB 35,000–38,000 per ton. In the medium to long term, as outdated capacity is phased out, the supply-demand dynamics improve, and policy support takes effect, prices are expected to stabilize. Leading companies with cost and technological advantages will dominate the industry, while high-cost small and medium-sized producers will be phased out. Moving forward, key factors to monitor include inventory drawdown, downstream production activity, cost dynamics, and policy developments. These factors will determine the timing of the price bottom and the pace of industry consolidation.
As an integrated internet platform providing benchmark prices, on March 23, the benchmark price for polysilicon from SunSirs stood at 43,800.00 RmB/ton, representing a decline of 17.87% compared to the beginning of the month (53,333.33 RMB/ton).
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