SunSirs: Polysilicon Market Sees Sluggish Trading Activity as New Orders Show Signs of Price Increases

On December 17, the Silicon Industry Branch released its weekly polysilicon market review. This week, the transaction price range for n-type re-melt polysilicon was 49,000-55,000 RMB/ton, with an average transaction price of 53,200 RMB/ton, unchanged from the previous week. The transaction price range for n-type granular polysilicon was 50,000-51,000 RMB/ton, with an average transaction price of 50,500 RMB/ton, also unchanged from the previous week.

The Silicon Industry Branch noted that this week's domestic polysilicon market exhibited “sluggish transactions with rising quoted prices.” Market activity was extremely quiet, with a further decline in the number of major companies signing contracts and new orders virtually stalled. However, most polysilicon producers raised their new order quotations to approximately RMB 65,000 per ton or higher.

The core driver behind the price hikes lies in widespread industry expectations that terminal demand will improve by the end of Q1 2026. January-February serves as a critical transition period where maintaining stability in the supply chain's pricing structure and inventory levels is paramount. Raising prices now primarily signals a firm commitment to price stability, providing foundational support for downstream wafer and cell segments to stabilize their pricing.

Supply remains broadly stable: Currently, 11 polysilicon producers are operational. Based on production schedules, December output is projected to stay below 120,000 tons. While minor increases from individual plant maintenance and resumption offset some losses, supply growth is constrained by reduced output during the dry season in Southwest China and persistently low industry-wide operating rates. China's annual polysilicon output is projected to reach approximately 1.33 million tons in 2025, with the top five producers accounting for about 78% of total output. Demand remains persistently weak: Downstream wafer, cell, and module segments have intensified production cuts to address high inventory levels and slow project launches at the terminal end. Annual wafer output is projected at 640GW, corresponding to polysilicon demand of about 1.26 million tons. The current dual weakness in supply and demand will likely cause polysilicon social inventories to continue accumulating in December, with annual inventory additions reaching approximately 70,000 tons (including imports and exports).

Overall, the market fundamentals of high inventories and weak demand remain unchanged. However, a stronger consensus on price stabilization is now driving market sentiment. In the near term, with no immediate improvement in downstream demand or prices, actual polysilicon transaction volumes are expected to remain limited. However, leading companies have clearly demonstrated their resolve to maintain firm pricing, with quoted price increases signaling their commitment to ensuring a stable transition across the supply chain. Should the industry successfully navigate inventory and price stability during January-February next year, the market could gradually emerge from its trough once terminal demand recovers.

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