Currently, there is a significant difference in operating rates among top-tier enterprises. For example, Tongwei is operating at full capacity, with a 100% operating rate, while GCL and Daqo New Energy have operating rates fluctuating between 30% and 60%. In contrast, second- and third-tier companies have even lower operating rates, with the better-performing ones maintaining around 50%, while the worst-performing ones may have completely stopped production.
Regarding the supply and demand situation of polysilicon in the fourth quarter and the first quarter of next year, the following analysis applies: Due to rising electricity prices in regions such as Yunnan and Sichuan, Tongwei’s operating rate is expected to drop significantly in the fourth quarter. This will result in the entire industry’s polysilicon production remaining at relatively low levels during these two quarters. Data shows that the actual production volume in August for the entire industry was 135,000 tons, while in September, it slightly increased to about 145,000 tons. Market supply and demand are expected to remain relatively balanced or slightly oversupplied in the upcoming two quarters. Additionally, the listing of polysilicon futures in the fourth quarter may attract more market participants, further impacting inventory levels and the supply-demand balance.
Regarding polysilicon inventory trends, as of the end of September, the total inventory of polysilicon stood at around 300,000 tons, equivalent to about two months of production. Upstream enterprises hold approximately 180,000 tons of this inventory, downstream users hold 30,000 to 50,000 tons, and intermediary traders also hold a certain amount. With the listing of polysilicon futures, intermediary traders’ inventories are expected to gradually increase to 80,000 tons or even more, eventually optimizing inventory to around one month of production.
The policy impact on polysilicon supply and demand may manifest in two main ways: first, market adjustments through corporate self-regulation, such as reducing operating rates or implementing internal industry adjustments; second, restrictions on new capacity and accelerated phasing out of outdated capacity from an industrial and energy consumption perspective. In particular, from an energy consumption perspective, these policies could accelerate the exit of outdated capacity, hastening the arrival of a supply-demand inflection point.
In terms of cost, a price of RMB 0.68/W corresponds to a cash cost of about RMB 35, which is a very stringent standard, and currently, less than 5% of the industry’s capacity can meet this level. The current polysilicon price is around RMB 40, which, although higher than the cash cost for most companies, still sees about 50% of the industry’s capacity with cash costs above RMB 40. This means that while the profit margin for this portion of the capacity is relatively small, it has not yet reached a level of widespread losses.
Looking ahead, by 2025, Tongwei’s capacity is expected to exceed 850,000 tons, GCL’s capacity is expected to reach more than 400,000 tons or close to 500,000 tons, while Daqo and Xinte are expected to reach around 300,000 tons each. By then, the share of effective output from leading enterprises will further increase, especially for Tongwei and GCL, whose relatively low costs provide them with strong competitiveness.
Source：https://mp.weixin.qq.com/s/4q8t7d_2aFpqpkf0LxUC9g
