Keywords: Polysilicon falling, high inventory, PV off-season pressure, negative cycle, latest price, demand recovery expectation
Core Sentence: Polysilicon prices continue to dip amid high inventory and weak PV seasonal demand, but the downward space is narrowing, and terminal demand is expected to recover gradually in the second quarter.
On March 31, the domestic polysilicon market continued its weak downward trend, with spot and futures prices falling simultaneously, but the decline narrowed compared with the previous period. According to data from the China Silicon Industry Association, the average transaction price of N-type polysilicon feedstock on the day was 38,200 RMB/ton, a decrease of 300 RMB/ton or 0.78% from the previous day, and a weekly decrease of 2.05%. The main futures contract (PS2605) closed at 34,280 RMB/ton, down 527 RMB/ton or 1.52%. As of mid-March, the average price of N-type polysilicon feedstock was 43.5 RMB/kg, and the price has continued to decline recently, mainly affected by the pressure of silicon wafer price reduction and weak market sentiment[superscript:8].
The continuous decline of polysilicon prices is mainly affected by the prominent contradiction between supply and demand. Currently, polysilicon enterprises are facing high inventory pressure, with the total inventory level remaining at more than 200,000 tons, and the inventory turnover cycle exceeding 2 months. The downstream photovoltaic industry is in the seasonal off-season, and module manufacturers maintain low procurement rates, with most purchases based on rigid demand, forming a negative cycle of "falling prices → reduced buying → further price drops". In addition, the cancellation of PV product export tax rebates starting April 1 has also brought certain pressure to the downstream photovoltaic industry, affecting the procurement demand of polysilicon[superscript:2][superscript:5].
Market feedback shows that some polysilicon enterprises have begun to reduce production and load to alleviate inventory pressure, but the effect is not obvious due to the weak demand. However, with the gradual end of the PV off-season and the launch of domestic distributed PV projects, terminal demand is expected to recover gradually in the second quarter, which will ease the inventory pressure of polysilicon enterprises. Industry insiders predict that the polysilicon market will continue to bottom out in the short term, and the downward space is limited. The market stabilization needs to wait for the substantial recovery of terminal photovoltaic installation demand and the obvious decline of inventory.
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