According to TESTPV, on December 25, 2024, leading polysilicon producers such as Tongwei, Daqo, and GCL-Poly announced production cut plans. Statistics show that these companies collectively reduced production by approximately 29,600 tons in December, a decrease of 31,800 tons compared to November. As a result, overall polysilicon output for December is expected to drop to 101,500 tons, aligning with downstream wafer demand and alleviating inventory pressure to some extent. December has become the month with the most significant production cuts, and the total output of polysilicon in January 2025 is expected to remain at around 100,000 tons, continuing the downward trend.
With downstream wafer production increasing, January 2025 is expected to see changes in the supply-demand relationship, with inventory beginning to decline and polysilicon prices potentially rising to some extent. However, due to still-high overall inventory levels, prices are expected to exhibit a gradual upward trend in January.
- Polysilicon Inventory and Quality
As of December 31, 2024, China's total polysilicon inventory reached 401,500 tons, with high-quality materials (dense silicon and re-feed silicon) accounting for over 80%. In January 2025, polysilicon output is expected to reach 101,500 tons, with consumption at 101,200 tons, maintaining a basic supply-demand balance. As wafer output rises to 46 million kilograms, polysilicon will enter an inventory clearance phase. Although initial inventory reductions may be small, the process will become more pronounced over time.
Since October 2024, the market has significantly increased its quality requirements for polysilicon. The proportion of high-quality materials has steadily risen, with top manufacturers producing materials that meet the requirements for N-type usage. The market has increasingly sought high-quality products, while the use of low-quality materials has gradually decreased.
- 2025 Photovoltaic Industry Demand and Price Outlook
In 2025, with the recovery of domestic and overseas demand, prices along the polysilicon industry chain are expected to rise. The first quarter of 2024, as a traditional off-season, saw continued polysilicon production cuts, while wafer output increased. Battery module factories operated at relatively low rates during this period, particularly in February, when inventory accumulation was at its peak.
However, as demand recovers in the second quarter and especially in the latter half of the year, prices are expected to rise. Demand for the photovoltaic industry in 2025 is projected to range between 650 GW and 700 GW. In the first quarter of 2024, monthly wafer production stabilized at around 46 GW. Given the off-season, particularly during the late January to early February holiday period, battery production may drop to just over 30 GW, creating a significant gap with wafer production.
- Inventory and Futures Market in the Photovoltaic Industry
The introduction of the futures market will accelerate inventory clearance in the photovoltaic industry. The first batch of futures contracts, with a storage capacity of 100,000 tons, is expected to absorb 30,000 to 50,000 tons of inventory. This will help reduce the current 400,000-ton inventory to around 300,000 tons.
Moreover, since the raw materials used by polysilicon and downstream companies are largely interchangeable, even if 80% of the market consists of high-quality silicon, the remaining 20% of carbonized or oxygenated silicon can be mixed for use, avoiding significant unsold inventory.
- Granular Silicon Inventory and Market Dynamics
Currently, granular silicon inventory is around 20,000 tons, reflecting a tight supply. Companies like GCL-Poly produce almost no inventory, selling as much as they produce, resulting in relatively low inventory pressure. Actual inventories stand at approximately 300,000 tons. If inventory levels drop to one week's turnover (about 30,000 to 40,000 tons), prices may rise. However, the impact depends on market liquidity and the stock held by traders.
- Wafer Demand and Cost Analysis
In January 2024, wafer demand is projected to range between 40 GW and 46 GW, corresponding to silicon consumption of 2.1 to 2.2 tons per GW. While silicon consumption is expected to decline annually, the rate of decrease is slowing due to the near-saturation of large-size and thin-wafer technologies. Additionally, the increased use of N-type silicon limits further reductions in silicon consumption.
The average full cost of the photovoltaic industry is approximately RMB 60,000 per ton, with cash costs at around RMB 55,000, primarily influenced by electricity prices. Electricity accounts for 60–70% of total costs in the polysilicon segment. The industry is currently operating at a loss based on current prices, necessitating supply-side adjustments through production cuts or energy consumption restrictions.
- Cost and Competitive Advantages of Leading Companies
Leading companies have relatively low photovoltaic costs, around RMB 50,000 per ton, with some companies achieving costs between RMB 40,000 and RMB 45,000. On average, a reasonable full-cost level is around RMB 50,000. Companies like Hongyuan Green Energy reduce raw material procurement and transportation costs through integrated production models, achieving production costs comparable to mainstream manufacturers, with cash costs as low as RMB 33,000 and comprehensive costs of RMB 40,000.
In granular silicon production, cash costs have decreased despite production cuts due to the modular nature of the production process and rotational maintenance mechanisms. Even with some modules undergoing maintenance, other modules continue operating normally, minimizing the impact of production cuts on the overall system.
Conclusion
The photovoltaic industry is undergoing a significant transformation. Polysilicon production cuts, inventory clearance, and future trends in market demand and pricing will continue to shape the industry's development.
Source：https://mp.weixin.qq.com/s/Tn3E5l5hgyBuguyuz7lcWg
