Polysilicon futures price breaks below 40,000 yuan/ton

Our reporter Yin Gaofeng

On March 19, a significant signal came from the upstream of the photovoltaic industry chain. At the close of trading, the main contract for polysilicon on the Guangzhou Futures Exchange fell below 40,000 yuan per ton, closing at 38,550 yuan/ton, a drop of 5.77%.

“This is a landmark event,” said Qu Fang, an investment advisor at Wanlian Securities, in an interview with Securities Daily. He explained that 40,000 yuan per ton is widely regarded as the cash cost line for some leading companies in the polysilicon industry. The futures price breaking this level indicates the market is exerting “extreme pressure” on high-cost capacities.

In the spot market, the China Nonferrous Metals Industry Association Silicon Branch (hereinafter “Silicon Branch”) released its latest weekly polysilicon price analysis on the evening of March 18. It showed that the average transaction price for N-type re-investment polysilicon was 43,200 yuan/ton, down 4.42% week-on-week; the average price for N-type granular silicon remained at 44,000 yuan/ton.

According to Shanghai Nonferrous Network data, since March, the price of re-investment polysilicon has fallen by over 20%.

Prices Continue to Decline

The direct cause of this price decline comes from downstream. The latest data from Shanghai Nonferrous Network shows that since the Spring Festival, the silicon wafer market has experienced rapid price drops due to competition among companies and market expectations. Some companies have adopted low-price sales strategies, with some models dropping by 20% to 30%.

“Losses in silicon wafer companies are being transmitted upstream,” said Shi Zhenwei, chief analyst at Shanghai Nonferrous Network for photovoltaics, in an interview with Securities Daily. He noted that due to costs and pessimistic sentiment, silicon wafer companies are aggressively lowering their purchase prices for polysilicon, leading some companies to “race to cut prices,” creating a cycle of price reductions.

It is worth noting that although domestic polysilicon production overall meets expectations, some leading companies’ recent large-scale “dual-distribution” strategies have had complex effects on the market. Shi Zhenwei explained, “On one hand, this helps these companies alleviate some inventory pressure; on the other hand, it increases pressure on the silicon wafer market and further suppresses polysilicon prices.”

From a supply and demand perspective, short-term market pressure is unlikely to ease. Shi Zhenwei revealed that some companies or bases have signaled plans to restart or increase production between late March and April. Meanwhile, some companies, to reduce inventory pressure, have preliminary plans to sell at prices close to cost. Downstream sentiment remains weak, which will likely cause polysilicon prices to fall again.

In Shi Zhenwei’s view, a more severe issue is that downstream battery and module sectors are generally pessimistic about their orders for April and May. Currently, there are no clear signs of bottom-fishing upstream. “The entire market is still shrouded in panic, and there is a high probability that prices will continue to decline in the short term.”

The Silicon Branch also stated that in the short term, weak demand and high inventory pressure remain the core contradictions in the market. Starting April 1, value-added tax export rebates for photovoltaic and other products will be fully canceled, which may slow overall export growth in the industry, weakening polysilicon demand. Meanwhile, industry inventories continue to accumulate, and the turning point for destocking has not yet appeared.

Accelerating the Clearance of Outdated Capacity

“Current competition is a competition of costs,” said Qu Fang. Some leading companies’ advantages in technology cost reduction, scale, and integration are widening the industry’s cost gap.

GCL Technology Holdings Limited (hereinafter “GCL Technology”)'s granular silicon technology, with its low energy consumption and continuous production, places its production costs at the lowest in the industry.

Public data shows that GCL Technology’s average cash production cost (including R&D costs) for granular silicon further decreased to 24.16 yuan/kg in Q3 2025, down from 27.07 yuan/kg in Q1 2025.

A GCL Technology representative told Securities Daily that thanks to increasing capacity and ongoing optimization and improvement of production processes, GCL’s granular silicon production bases continue to set new cost records. The company’s low-carbon granular silicon production has broken the traditional high-energy consumption perception of polysilicon and is expected to gain resource advantages in the future global low-carbon trade system.

“This technological dividend means that even at around 40,000 yuan/ton, these companies can still cover their cash costs and maintain operational resilience,” said Qu Fang. Every cost reduction in advanced capacity is like driving a nail into the coffin of lagging capacity.

“Currently, spot prices are significantly below the industry’s average full-cost line, indicating that the industry has entered a state of widespread losses,” an insider from a photovoltaic company told Securities Daily.

“But it is precisely this kind of loss that is the most effective force driving capacity clearance,” said Qu Fang. He believes that currently, polysilicon still faces high inventory pressure, and the market in Q2 will mainly focus on “bottoming out and destocking.” During this period, market mechanisms will play a decisive role. When prices stay below full costs for a long time and cash flow continues to outflow, capacity lacking technological and scale advantages will be forced out.

The Silicon Branch also stated that from policy and market perspectives, the survival of the fittest in the industry chain is an inevitable trend. In this deep adjustment, companies with lower production costs and better technical indicators will gain relative advantages, while higher-cost and less advanced capacities will face accelerated clearance.