SMM

During the dry season, electricity prices continue to rise, self-discipline meetings are frequently held, and the pressure from high costs and inventory keeps increasing. Under multiple pressures, SMM understands that domestic polysilicon production in December is expected to decline sharply again, with the production schedule expected to drop to 91,100 mt, down 18.3% MoM from November.

SMM data shows that domestic polysilicon production in November fell short of previous market expectations (120,600 mt). Due to the reduction of top-tier enterprises in Sichuan and Yunnan exceeding previous expectations, combined with the reduction or halt in production by some small and medium-sized enterprises in other regions, the actual production in November was 111,600 mt.

Entering December, domestic polysilicon enterprises may significantly reduce production again. The main driver for the reduction is the continuous rise in electricity prices. SMM has learned that electricity prices in the Sichuan and Yunnan regions will rise again in December compared to November, with some enterprises revealing that some electricity prices will approach 0.6 yuan/kWh. The cost pressure brought by electricity prices has led local enterprises to further reduce production—production in Yunnan is almost zero, and in Sichuan, it is only a few thousand mt.

Additionally, under the pressure of high costs, some second and third-tier enterprises have also halted production, and some polysilicon self-supply enterprises have reduced or halted production.

Furthermore, due to the ramp-up effect of some capacities, the actual effective supply is about 85,000 mt, which can only meet the demand for 37 GW of wafers.

In summary, the polysilicon market supply in December will see a significant contraction, which may provide some support for polysilicon prices. However, it should be noted that due to the current off-season and the historical inventory pressure of polysilicon, market prices are unlikely to see a significant increase in the short term, with the focus being on alleviating pressure.