The "anti-involution" in the photovoltaic industry continues to deepen, and polysilicon prices enter a downward adjustment phase

Reporter Yin Gaofeng

On March 4th, the Non-Ferrous Metals Industry Association of China Silicon Industry Branch (hereinafter referred to as “Silicon Industry Branch”) released the latest weekly polysilicon price data. The data shows that this week, the transaction price range for N-type multicrystalline silicon re-investment material is between 45,000 RMB/ton and 53,000 RMB/ton, with an average transaction price of 48,300 RMB/ton, down 6.58% week-on-week; the transaction price range for N-type granular silicon is between 43,000 RMB/ton and 45,000 RMB/ton, with an average of 44,000 RMB/ton, down 12.87% week-on-week.

The Silicon Industry Branch stated that the main reason for the sharp decline in prices is: on one hand, post-holiday terminal installation projects are progressing slowly, and the recovery in downstream module and cell production is below expectations, resulting in demand not effectively transmitting from bottom to top, and the actual consumption capacity of silicon materials remains weak; on the other hand, social inventory of multicrystalline silicon has been accumulating positively for seven consecutive months, reaching a high of 480,000 tons by the end of February.

According to the Silicon Industry Branch, the domestic production of polysilicon in February was approximately 84,400 tons, a significant decrease of 17.3% month-on-month. Despite some leading companies halting production for maintenance, which constrained supply, there was also small-scale resumption of previously reduced capacity, partially offsetting the overall supply contraction. It is expected that the total output of polysilicon in March will be between 87,000 and 89,000 tons.

The Silicon Industry Branch said that from the supply side, the support for market prices has weakened. The downstream wafer segment maintains low operating rates, with no large-scale inventory buildup motivation, and demand also struggles to support higher prices. Overall, weak demand and high inventory pressure will be the main factors influencing the market trend in March. The post-holiday demand recovery is slower than previous market expectations, and the industry’s extremely high inventory levels need to be digested.

The Silicon Industry Branch believes that in the short term, without unexpected policy stimuli or a strong rebound in demand, the polysilicon market is expected to enter a downward adjustment phase.

“The current polysilicon market faces dual pressures of weak demand and historically high inventories, and prices have entered a downward adjustment phase. Although the ‘anti-involution’ policy provides a bottom support for prices, there is still room for prices to fall in the short term before supply and demand reach a new balance,” said Qu Fang, an investment advisor at Wanlian Securities, in an interview with Securities Daily. He noted that polysilicon is currently in a phase of “short-term pain” and “long-term restructuring.” While recent price drops are directly caused by supply-demand imbalance, the “anti-involution” policy is setting a new framework for the industry’s long-term development.

Currently, the “anti-involution” campaign in the photovoltaic industry is deepening. The Ministry of Industry and Information Technology emphasized at a photovoltaic industry entrepreneurs’ symposium at the end of January that, under the current situation, “anti-involution” is the main contradiction in the regulation and governance of the photovoltaic industry. Various departments should strengthen coordination, work together, and use measures such as capacity regulation, standard guidance, quality supervision, price law enforcement, risk prevention of monopolies, intellectual property protection, and technological advancement to promote the industry’s return to healthy competition and rational development through market-based and rule-of-law approaches.

“Top-level guidance of ‘rule of law and market orientation’ means that future ‘anti-involution’ will be driven by legal and regulatory means, using market mechanisms to clear excess capacity,” Qu Fang said. He believes that as the “anti-involution” campaign continues to deepen, leading companies with advantages in technology, product innovation, and cost control will be the first to break through, while outdated and high-energy-consuming capacities will be accelerated for clearance.

Zhong Baosheng, Chairman and General Manager of Longi Green Energy Technology Co., Ltd., told Securities Daily that the core of innovation in the polysilicon segment is cost reduction and energy consumption reduction. He sees “energy consumption” and “environmental protection” as key points, advocating for the formulation and dynamic improvement of unit product energy consumption limits and pollutant emission standards. Companies that fail to meet standards should be required to upgrade within a deadline, and those that do not improve should be eliminated.

“The company always adheres to a long-term development philosophy, actively resisting low-price dumping and irrational expansion, while continuously iterating technology and reducing costs to enhance core competitiveness,” said a relevant person from GCL Technology Holdings in an interview. Thanks to continuous optimization and improvement of capacity scale and production processes, the company’s granular silicon production bases are constantly lowering costs. Additionally, leveraging the low-carbon production advantages of granular silicon, the company is breaking the traditional high-energy consumption perception of polysilicon and is expected to gain resource advantages in the future global low-carbon trade system.

(Edited by Shangguan Menglu)

(Edited by Wen Jing)

Keywords: Polysilicon Photovoltaic