Silicon Industry Branch: The core contradiction in the current polysilicon market remains the imbalance between supply and demand.

The core contradiction in the current market remains the imbalance of supply and demand: despite polysilicon producers reducing output in February, which lowered the industry’s operating rate to 35.5%, industry inventories continue to accumulate, indicating that the supply contraction is still insufficient to offset the shrinking demand. The main reason for the subdued trading this week is that the accelerating decline in market prices has intensified downstream buyers’ wait-and-see mentality of “buying on the rise, not on the fall,” and to avoid inventory devaluation losses caused by sharp price drops after signing contracts, downstream procurement frequency has been shortened to weekly. This extreme caution further suppresses market activity, resulting in a dull trading atmosphere. According to the Silicon Industry Branch, domestic polysilicon production in March was 92.6k tons, a slight increase of 9.7% month-on-month. The top five companies produced a total of 66.5k tons, accounting for 71.8%. Based on the April production schedule, except for one leading company planning maintenance, most other companies are maintaining their original operating rates. It is expected that polysilicon output in April will be between 85,000 and 86k tons, roughly an 8% decrease month-on-month. From a supply and demand perspective, the expected reduction in supply in April will be offset by the weakening demand, making it difficult for industry inventories to be effectively cleared. Industry insiders generally expect that current prices are still in the process of finding a bottom. After prices bottom out, the industry will still need to go through a difficult “bottoming phase” to alleviate cash flow pressures and clear inventories. Only when inventories are substantively reduced and supply and demand return to balance can the market potentially see a trend reversal. (Silicon Industry Branch)