The supply-demand dynamics remain unchanged.

Whether prices can sustain a rebound depends on two key factors: first, whether companies’ efforts to cut production and phase out outdated capacity will be effectively implemented; second, whether downstream demand will grow further to drive effective inventory reduction in the industry.

Previously, polysilicon spot prices had been in a continuous downward trend. In the first quarter, spot prices for polysilicon fell sharply by 17% to 26%, approaching last year’s lows. Relevant data shows that the average price of N-type polysilicon re-melting material fell by 25% to RMB39.75 per kilogram; N-type granular polysilicon dropped by 17% to RMB 41.5 per kilogram; N-type mixed-grade material declined by 26.47% to RMB 37.5 per kilogram; and N-type dense material decreased by 24.27% to RMB 39 per kilogram.

Supply exceeding demand is a key factor behind the sustained decline in polysilicon prices. In March, the supply-demand balance remained in a state of oversupply, with the surplus expanding further, leading to continued price declines. Against the backdrop of weak demand, several companies still signaled plans to increase production in March. While higher operating rates may reduce unit costs, they also further widened the scope for spot price declines. Entering April, market expectations for demand remained pessimistic, while production continued to rise, causing spot prices to come under further downward pressure. Affected by this, futures prices also broke through support levels and fell. On one hand, falling spot prices amid high inventory levels dragged futures prices down in tandem; on the other hand, weak demand combined with expectations of increased production further drove prices to break through support levels.

In a market characterized by oversupply, the key support level for falling prices is the lowest cash cost range. By early April, the average spot price had already fallen below unit cost. In this oversupply environment, this has further opened up room for price declines. Relevant data shows that as of April 10, the average price of N-type polysilicon re-melting material fell by 3.42% to 35.25 RMB/kg; N-type granular polysilicon stabilized at 35 RMB/kg; N-type mixed-grade material dropped by 6.67% to 35 RMB/kg; and N-type dense material declined by 4.17% to 34.5 RMB/kg.

As prices approach the lowest cash cost range, upward price elasticity is significant, and production cuts by manufacturers could help stabilize prices or even trigger a sharp rebound. However, whether prices can rebound to above RMB 50,000 per ton will depend on whether further “anti-overcapacity” measures are implemented, the progress of production cuts, the recovery of demand, and the pace of inventory drawdown. If inventories remain high, the extent of the price rebound is expected to be limited.

Without clear drivers such as production cuts or price hikes, the potential for further price increases remains limited.

The recent rise in polysilicon futures prices stems more from a temporary rebound following a price drop to low levels than from a fundamental reversal in the industry’s supply-demand dynamics. Specifically, on one hand, there has been a concentrated improvement in market sentiment. As market expectations for an improvement in the oversupply situation grow, the trend of continuously falling spot prices is expected to reverse. On the other hand, there is strong support from the cost side. When prices fell to RMB 30,000 per ton, manufacturers’ willingness to operate declined significantly, while downstream buyers became increasingly active due to the low prices. These marginal shifts on both the supply and demand sides triggered a sharp price rebound, making the 30,000-yuan-per-ton level a solid support. However, it is important to maintain a rational perspective: given the current industry conditions, there are no clear signs of a reversal in the fundamental supply-demand dynamics of polysilicon. It is difficult for the industry to coordinate production cuts and stabilize prices through inter-company cooperation, making it challenging to establish a sustainable source of support.

In the short term, the oversupply situation in the polysilicon industry remains unchanged, and the pressure from high inventory levels has not been effectively alleviated. Whether prices can sustain a rebound depends on two key factors: first, whether companies’ measures to reduce production and phase out outdated capacity can be effectively implemented to achieve a substantial contraction on the supply side; and second, whether downstream demand can grow further to drive effective inventory drawdown.

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