According to Sina Finance, polysilicon prices have fluctuated since the beginning of the year, driven by themes such as "anti-monopoly" measures and efforts to curb "excessive internal competition." As of June 11, the main polysilicon futures contract closed at RMB37,710 per ton; the price surged sharply in late trading to hit the daily limit, marking an intraday increase of 8.99%.
Supply-side pressure persists
Industrial silicon output boosted by the high-water season in Sichuan and Yunnan
Data shows that domestic industrial silicon production in May reached 331,300 tons, up 3.6% month-on-month and 7.6% year-on-year. Cumulative production from January to May totaled 1.6319 million tons, a year-on-year increase of 6%. With the arrival of the high-water season, silicon enterprises in Sichuan and Yunnan are resuming production in batches following a reduction in hydroelectric power costs. Industrial silicon output is projected to rise by approximately 10% month-on-month in June; barring unexpected power rationing or environmental inspections, high production levels are expected to be maintained in July.
Widespread production resumption in the polysilicon industry
Statistics from the Silicon Industry Branch of the China Nonferrous Metals Industry Association indicate that domestic polysilicon production in May was 84,500 tons, a month-on-month increase of 2.4%, while the industry's average operating rate remained low at 35.5%. However, based on corporate production schedules, four companies are set to ramp up output in June, pushing total monthly polysilicon production up slightly to 90,000 tons. Specifically, Tongwei plans to restart 370,000 tons of capacity (adding 5,000 tons to monthly output), and GCL plans to restart 60,000 tons of capacity (adding 2,000 tons). Companies such as Xinte and Asia Silicon are also increasing production, collectively contributing an additional monthly output of over 10,000 tons. Regarding inventory, data from FerroAlloy Online shows that as of June 5, the polysilicon industry reduced inventory by 3,000 tons to 299,000 tons—a month-on-month decrease of 0.99% and a year-on-year increase of 6.41%. As of June 9, warehouse receipts at the Guangzhou Futures Exchange (GFEX) totaled 11,120 lots, equivalent to 33,360 tons of physical product. Room for Growth in Photovoltaic Demand
Between March and April, newly installed photovoltaic (PV) capacity declined year-on-year, and the drop in demand rippled upstream from downstream sectors to the polysilicon segment. However, as electricity prices fell during the high-water season, downstream enterprises showed a greater willingness to increase production; consequently, production schedules for wafers, cells, and modules rose month-on-month, driving up the underlying demand for polysilicon. Industry analysts forecast that wafer production schedules for June will reach 56 GW, translating to a polysilicon demand of 100,800 tons. Downstream, cell and module production schedules are projected at 50 GW and 40 GW, respectively—both slight increases over May figures. Overall, the growth rate of PV demand is currently lagging slightly behind that of supply in the short term.
Monitoring the Potential Impact of Unexpected Events
Shanxi province has launched a region-wide safety overhaul; as a result, clean coal output and inventories at mines have dropped to historic lows, triggering a rebound in coal prices. Theoretically, energy costs constitute a significant portion of production expenses for industrial silicon and certain polysilicon manufacturing processes. However, leading companies such as Tongwei, Daqo, and GCL operate captive power plants or hold long-term direct power purchase agreements in regions like Xinjiang and Inner Mongolia, meaning short-term coal price fluctuations rarely translate into changes in polysilicon production costs. Therefore, the rise in coal prices currently supports market sentiment only in theory, with limited actual impact.
Additionally, market sentiment has been influenced in recent days by news regarding potential policies to phase out 30% of production capacity across various PV segments and the introduction of minimum or tiered efficiency requirements for modules in domestic power plant tenders. From measures to curb "involution" (destructive internal competition) and state-backed stockpiling to anti-monopoly actions, the PV industry is undergoing corrections focused on legal compliance and standardization. As these policies remain under development and implementation, the future policy direction is expected to become increasingly clear.
Overall, the polysilicon industry is currently "bottoming out" amidst deep losses. Nominal capacity on the supply side is experiencing a period of oversupply, and the pace of industry capacity adjustment is expected to accelerate. Furthermore, while June and July mark the traditional off-season for installations—and downstream production schedules are expected to recover—the significant inventory overhang of nearly 300,000 tons of polysilicon suggests that any improvement in market fundamentals will likely be limited. In the short term, polysilicon prices are expected to fluctuate within a low range, though news-driven factors could trigger unusual volatility. In the medium term, should policies provide clear guidance regarding distributed generation installations and the phase-out of outdated, high-energy-consuming capacity, polysilicon prices could stabilize and rebound alongside the industry's development.
SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.
https://graph.100ppi.com/?w=550&h=332&c=p&id=1249&btime=2026-03-01&etime=2026-06-11&state=english
SunSirs: Ferrosilicon Supply Recovers Slightly; Market Enters Oscillating Phase
The domestic ferrosilicon market is currently characterized by a complex interplay of supply-demand dynamics, costs, and profit margins. Operating rates and average daily output have seen a slight rebound, leading to a gradual easing of overall supply constraints. Prices for upstream raw materials—such as coking coal, coke, and semi-coke—have retreated, and combined with electricity price reductions in certain regions, the cost support for production has weakened. While downstream essential demand remains resilient, there is a lack of significant growth, and smelting profit margins vary markedly across regions. Amidst these intertwined factors, the upward momentum for spot ferrosilicon prices has faded, shifting the market into a range-bound oscillation pattern.
I. Benchmark Price and Regional Spot Prices (as of June 9)
As of June 9, the SunSirs benchmark price for ferrosilicon stood at 5,564.29 yuan/tonne, marking a slight single-day decline and a marginal 0.2% drop since the beginning of the month; current prices remain in the upper range of the past year, with relatively limited volatility year-to-date. Regional quotes show distinct variations: in the Ningxia production area, mainstream ex-factory quotes are relatively high, smelting profits are substantial, and spot prices remain firm. In contrast, transaction prices in Inner Mongolia are slightly lower; local smelters are operating at a slight loss, allowing for more negotiation room on shipments. In Gansu, the release of new production capacity has increased spot market circulation, causing quotes to edge down in line with market trends. In major steel-consuming regions like East and North China, procurement is dominated by steel mill tenders; tender prices closely track ex-factory prices from production areas, keeping inter-regional price spreads within a reasonable range. Overall market trading is driven primarily by targeted long-term contracts and short-term orders for essential needs, with minimal speculative stockpiling.
II. Domestic Production, Inventory, and Supply Status
The supply side shows an overall trend of slight growth. Data monitoring of 136 independent ferrosilicon enterprises indicates that the industry's capacity utilization rate rose by 0.90% week-on-week, with the national comprehensive operating rate reaching 30.73%. Average daily output increased by 350 tonnes to 16,121 tonnes—a weekly production rise of 2.22%—signaling a steady increase in market supply. There are significant regional disparities in production capacity changes; Gansu continues to see the commissioning of new capacity, making it the primary source of supply growth, while facilities in other producing regions are operating relatively stably, with no instances of simultaneous restarts or maintenance shutdowns.
Overall, inventory levels have seen a slight decline. Both producer inventories and exchange warehouse receipts have decreased; on June 9, the number of ferrosilicon warehouse receipts fell by 129 lots month-on-month. While this has eased supply pressure in the circulation sector, the trend of rising supply is gradually offsetting the bullish impact of the inventory drop. Overall, domestic ferrosilicon supplies remain ample with no regional or national shortages, and supply-side support for prices is gradually weakening.
III. Domestic and International Demand Situation
Domestic demand remains resilient, with minimal overall fluctuation. In the key downstream steel sector, hot metal output has dipped slightly; steel mills are conducting raw material tenders on an as-needed basis with a steady procurement pace, showing no signs of concentrated restocking or drastic volume cuts. Secondary demand sources remain stable; the magnesium metal industry is maintaining high production levels, providing consistent, routine procurement support that offsets the slight softening in steel-related demand.
IV. April 2026 Customs Import and Export Data
International demand shows medium-to-long-term support; domestic ferrosilicon exports rebounded to 31,400 tonnes in April. The industry anticipates monthly exports will stabilize around 35,000 tonnes, with overseas orders serving as a crucial channel for absorbing domestic supply. Global ferrosilicon trade is proceeding normally, with steady baseline demand from major overseas consuming nations—showing no disruptions or refusals to purchase—and no supply shortages in the international market. The overall demand landscape is characterized by "stable domestic demand and rising external demand," yet the lack of significant volume growth makes it difficult to drive a sustained upward trend in prices.
In April 2026, both domestic ferrosilicon imports and exports declined. Exports of mainstream ferrosilicon varieties (silicon content >55%) totaled 29,091.32 tonnes for the month, down 32.14% month-on-month and 18.22% year-on-year; meanwhile, exports of niche ferrosilicon varieties (silicon content ≤55%) saw a slight month-on-month increase but remained down year-on-year. Imports also contracted; the volume of ferrosilicon imports in April fell by 30.42% month-on-month, indicating a weakening in the replenishment of overseas supplies. Cumulative exports from January to April totaled 127,900 tonnes, a year-on-year increase of 7.3%, reflecting stronger overall overseas demand compared to the same period last year. Short-term monthly fluctuations in imports and exports are primarily driven by the pace of overseas purchasing and international price spreads; however, the resilience of external demand remains in the medium to long term, providing supplementary support to the domestic market.
V. Analysis of Price and Profit Linkages Across the Supply Chain
Upstream inputs for ferrosilicon primarily include coking coal, coke, semi-coke, and electricity. Recently, coal and coke prices have declined month-on-month while semi-coke prices remained stable; simultaneously, settlement electricity prices for May were lowered in regions such as Qinghai. The combination of these factors has continuously weakened cost support for ferrosilicon production, though the decline in raw material prices has been limited, preventing a collapse in costs. Cost changes have directly impacted smelting profits, resulting in significant regional divergence: smelting enterprises in the Ningxia production region maintain reasonable profit margins, whereas those in Inner Mongolia are operating at a loss of 100 yuan per tonne; these operational disparities have led to varying attitudes among manufacturers regarding price support.
Downstream, product prices in sectors such as steel and magnesium remain stable, making it difficult for downstream profits to be transmitted upstream to the ferrosilicon segment. Downstream enterprises are strictly controlling raw material procurement costs and show limited acceptance of high ferrosilicon prices, further constraining the potential for spot price increases. The industry chain is characterized by "weakening costs, stable demand, and divergent profits," with relatively weak linkage between upstream and downstream sectors.
VI. Outlook
In the short term, the ferrosilicon market is expected to fluctuate within a range. On the supply side, production continues to rise slightly while cost support gradually weakens, resulting in insufficient upward momentum for prices. However, factors such as slight inventory destocking, resilient domestic and overseas demand, and the willingness of producers in loss-making regions to support prices limit the scope for a sharp price decline, leading to a balance between bullish and bearish market forces.
SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.
