Since August, under the dual support of the price compliance guidelines in the photovoltaic industry and the self-regulatory initiative of leading enterprises, the domestic polysilicon spot market has started a recovery trend. On August 6, leading polysilicon enterprises reached a consensus and signed a proposal, clarifying two core principles: resolutely implementing sales at full cost and strictly implementing the industry's energy consumption control standards. Boosted by policy guidance and industry self-discipline sentiment, the spot price of polysilicon continued to rise, jumping from a low of less than 32,000 RMB per ton at the end of July to a maximum of 40,700 RMB per ton, an increase of nearly 28%, and the price bottom was effectively raised. However, this round of price increase is mainly driven by market sentiment and lacks substantial transaction support, casting doubt on the sustainability of the market trend. On August 18, the polysilicon futures market fell sharply, and then fell into a range-bound trend.

The current recovery of polysilicon prices does not stem from a reversal of fundamental factors but from adjustments in market expectations and the restructuring of valuations. At the end of July, the State Administration for Market Regulation issued guidance on price compliance within the photovoltaic industry; in early August, the expectation that "prices will rebound above the full cost" drove up polysilicon prices. After leading enterprises signed a self-regulation initiative on August 6, spot quotations for polysilicon continued to rise, and the futures market trended upward with fluctuations. The industry initiative clarifies two key requirements: first, to resolutely implement sales at full cost; second, to strictly enforce energy-consumption control standards. The initiative specifies that the sales prices of all photovoltaic products (including bidding quotations) shall not be lower than the corresponding costs calculated in accordance with the General Principles for Cost Accounting Models of the Photovoltaic Industry. Although details such as production-reduction plans and specific pricing rules have not yet been finalized, the warming of market sentiment coupled with rising spot quotations has led to a sharp phased increase in polysilicon futures prices.

The polysilicon industry has obvious characteristics of heavy assets and high depreciation. Under the rigid constraint of full-cost sales, the industry's price center is expected to achieve a systematic upward shift, with the price bottom rising to 36,000 to 38,000 RMB per ton, and is expected to break through 42,000 RMB per ton under optimistic expectations, opening up space for the restoration of industry profits. The implementation of this proposal has boosted market confidence in the upward shift of the polysilicon price bottom, and the rise in spot quotations has further solidified the price bottom.

The fundamental situation of the industry has not seen substantial improvement. The core contradictions of oversupply and continuous inventory accumulation remain prominent, which is the core reason why the futures market has taken the lead in falling this round. At present, polysiloxin output is still growing, downstream demand is weak, the market is still in a state of oversupply in the short term, and there is pressure on inventory accumulation. From the supply side, although the pace of polysilicon output release has slowed down, the overall output is still on an upward trend. From the demand side, the situation is still not optimistic. The downstream's ability to take over continues to be weak, and the terminal has a low acceptance of this round of price increases. At present, although silicon wafers and battery cells have raised their quotations simultaneously, there are basically no actual transactions; the quotation of the module link is obviously differentiated, and the overall increase is small, which fully reflects the current situation where terminal power stations are under profit pressure and unable to bear the price increases from the upstream. The industry may need to further reduce production and inventory to promote the restoration of the supply-demand pattern, thereby providing support for the stabilization and recovery of prices.

Overall, the industry policy support has solidified the price floor at present, but the fundamentals have not yet reversed, and the market will continue the pattern of a rising bottom with repeated fluctuations.

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