Average transaction price drops below 50,000 yuan/ton! Silicon material prices plummet significantly. Experts say it will be difficult to stabilize in the second quarter.

Recently, the prices of key upstream raw materials in the photovoltaic industry chain, polysilicon, have fallen sharply. Data released by the Silicon Industry Branch on March 4 shows that this week, the transaction price range for n-type reprocessed polysilicon is 45,000–53,000 yuan/ton, with an average transaction price of 48,300 yuan/ton, down 6.58% month-on-month; the transaction price range for n-type granular silicon is 43,000–45,000 yuan/ton, with an average of 44,000 yuan/ton, down 12.87% month-on-month.

As the “cost anchor” in the photovoltaic industry chain, the significant fluctuations in silicon material prices directly impact downstream wafer, cell, and module segments, affecting the profitability and development pace of the entire industry. A staff member from Daqo Energy told Huaxia Times that silicon material prices are influenced by market supply and demand and inventory levels. Currently, the company’s operating rate remains about the same as in Q4 last year, maintaining around 50%.

High Inventory Leads to Price Drops

Looking back at Q4 2025, polysilicon prices once remained firm, consistently above 50,000 yuan/ton. According to weekly data released by the Silicon Industry Branch on February 11, 2026, the transaction price range for n-type reprocessed polysilicon was 51,000–53,000 yuan/ton, with an average of 51,700 yuan/ton; for n-type granular silicon, it was 50,000–51,000 yuan/ton, with an average of 50,500 yuan/ton.

Recently, silicon material prices have accelerated downward, mainly due to two factors. The Silicon Industry Branch stated that, on one hand, after the holiday, terminal project installations have been slow to restart, and the operating rates in downstream module and cell segments have not recovered as expected, resulting in demand that has not effectively transmitted upstream, leaving actual silicon consumption weak. On the other hand, social inventory of polysilicon has been accumulating positively for seven consecutive months, reaching a high of 480,000 tons by the end of February. Against the backdrop of weak long-term demand, high inventory has become a core contradiction affecting the market, prompting some companies to lower prices to clear stock.

In terms of market transactions, reporters learned that activity this week was slightly higher than before the holiday, with 2–3 companies securing bulk orders, mostly for delivery. The increase in transaction volume is not due to improved demand but because some companies are lowering prices to reduce inventory pressure, leading to a significant decline in the market’s main transaction price level.

Regarding production, industry statistics show that in February, domestic polysilicon output was about 84,400 tons, a sharp decrease of 17.3% month-on-month. Despite some leading companies halting production for maintenance, which constrains supply, there was also small-scale resumption of previously reduced capacity, partially offsetting the overall supply contraction. Overall, polysilicon production in March is expected to be between 87,000 and 89,000 tons.

From the supply side, support for market prices has weakened. Downstream wafer segment operating rates remain low, with no large-scale inventory buildup motivation, and demand is unlikely to support upward price movement.

Chen Jiahui, an analyst from SMM’s Silicon Photovoltaic Division, told Huaxia Times that in March, the overall operating rate of wafer companies was 49.8%, compared to an average of 57.39% for the whole of 2025. For example, the fully loaded cost of 210R wafers without tax reached 1.41 yuan per piece in February, while the average monthly selling price was only 1.12 yuan per piece (excluding VAT), resulting in a profit margin of -20.57%. In summary, the low operating rate is mainly due to ongoing losses, forcing companies to reduce production.

Breaking Industry Cost Lines

As silicon material prices continue to decline, current market prices have fully broken through the industry’s average total cost line, creating differentiated loss pressures among companies. Xu Yanbin, a silicon material analyst at Zhuo Chuang Information, told Huaxia Times that currently, top-tier companies are operating at slight losses or near cash costs, while second- and third-tier and lagging capacity are already deeply unprofitable.

It is also revealed that costs vary significantly among different processes and companies. Leading improved Siemens process producers, benefiting from low electricity prices and economies of scale, have cash costs of only 42,000–46,000 yuan/ton, with total costs of 50,000–56,000 yuan/ton. Meanwhile, second- and third-tier companies, due to high energy consumption, small scale, and heavy depreciation, have total costs ranging from 58,000 to 66,000 yuan/ton, with even larger gaps in lagging capacity.

Xu further pointed out that the ongoing price decline, combined with rising electricity prices during dry seasons, inventory write-downs, and low industry operating rates, will significantly impact the first quarter performance of silicon companies. The industry as a whole is likely to incur losses, with leading companies experiencing slight losses and second- and third-tier companies suffering more severe losses.

Regarding market outlook, industry institutions and experts generally remain cautious. The Silicon Industry Branch stated that weak demand and high inventory pressure will be the main factors influencing the March market trend. Post-holiday demand recovery is slower than previously expected, and the industry’s extremely high inventory levels need to be digested. In the short term, without unexpected policy stimuli or a strong rebound in demand, the polysilicon market is expected to enter a downward adjustment phase.

Xu predicts that in the short term, silicon material prices will be supported near the cash costs of top-tier companies, around 40,000–43,000 yuan/ton, with possible brief dips below but unlikely to sustain. Prices in Q2 are unlikely to stabilize significantly, mainly remaining at the bottom or depleting inventories, with high inventory, ample supply, weak downstream operation, and export policy adjustments continuing to suppress prices.

Currently, domestic silicon inventory has reached a historic high, corresponding to about 4–5 months of industry demand, creating enormous pressure. Regarding inventory reduction, Xu believes that high inventory remains the core obstacle to price stabilization. Under neutral assumptions of industry-led production cuts and gradually recovering downstream demand, monthly inventory reduction will be limited. It is estimated that it will take 3–6 months for inventories to fall to around 300,000 tons. If demand recovery is weaker than expected or capacity reductions are insufficient, the inventory reduction cycle could be extended further.

(Article source: Huaxia Times)