Photovoltaic Giants Jointly Reduce Production: 1.6 Million Tons Of Silicon Material Production Capacity Enters Maintenance Period

Against the backdrop of the continued downturn in the photovoltaic industry chain, the upstream polysilicon sector took the lead in launching an "anti-involution" campaign. Tongwei Co., Ltd., Daquan Energy, and GCL-Poly Technology, the three major silicon material giants, simultaneously announced plans to cut production, involving a total capacity of more than 1.6 million tons, accounting for more than 60% of the country's total capacity. This move is intended to alleviate the current imbalance in supply and demand in the market.

Since the beginning of this year, all links in the photovoltaic industry chain have generally fallen into losses, among which the upstream polysilicon link has performed particularly well. Data show that in the first three quarters of this year, Tongwei Co., Ltd., Daquan Energy and GCL Technology lost CNY3.973 billion, CNY1.099 billion and CNY2.971 billion respectively.

Since May 2024, the price of polysilicon has fallen below the cash cost line. According to the latest market data, the average transaction price of n-type reinvested materials is CNY40,300/ton, the average transaction price of n-type granular silicon is 37,000/ton, and the average transaction price of p-type silicon materials is only CNY33,100/ton, all of which are lower than the minimum production cost of CNY35,000-45,000/ton.

At the special symposium on high-quality development of the photovoltaic industry held on December 5, representatives of 33 leading companies conducted in-depth discussions on preventing "involution" vicious competition. This production cut is a positive response to the spirit of the meeting.

Currently, the inventory of polysilicon companies remains at a relatively high level of 278,000 tons, which is approximately equivalent to 2-3 months of digestion. The industry generally believes that silicon material prices have hit the bottom and further downside space is limited.

The latest assessment from the Silicon Industry Branch points out that polysilicon prices are expected to gradually return to a rational range in the future. In the short term, the production cuts will significantly reduce market supply. This, combined with the concentrated procurement demand before the Spring Festival, may lead to periodic supply and demand tensions.