Recently, six leading polysilicon industry players, including Tongwei Solar, GCL, Daqo New Energy, Xinte Energy, Asia Silicon (Qinghai) Co., Ltd., and East Hope Group, are reportedly considering forming a consortium to establish a fund aimed at acquiring and integrating the remaining polysilicon production capacities, thereby facilitating the clearance of excess capacity in the sector.
“Relevant meetings have already taken place, but the specific details are currently only known to the executives who attended, and a unified plan is unlikely to be formed so quickly,” stated a relevant executive from one of the leading polysilicon firms.
Another executive from a top-tier company claimed to have no knowledge of the matter, deeming the proposal’s feasibility low. However, multiple industry insiders have emphasized that, regardless, capacity control and industry mergers and acquisitions are inevitable trends in the polysilicon sector.
The polysilicon industry experienced a rapid growth phase from 2021 to 2023. Nevertheless, with the explosive increase in production capacity, a mismatch between supply and demand emerged, leading to a continuous decline in polysilicon prices starting from 2024. Prices have now fallen below cost levels, resulting in widespread losses across the industry.
According to the 2024 annual reports disclosed by relevant companies, Tongwei Solar, GCL, Daqo New Energy, and Xinte Energy collectively incurred losses of nearly RMB 19 billion yuan. To address market challenges, companies within the industry have generally adopted production cut measures to expedite the capacity clearance process.
It is understood that company owners or key figures from the six enterprises attended the discussions. The specific details of the proposal are still under negotiation and will be submitted to relevant departments after finalization.
The current proposal circulating is that the six polysilicon firms will take the lead in establishing a RMB 70 billion yuan fund to acquire and integrate polysilicon production capacities outside the consortium.
The Silicon Industry of the China Nonferrous Metals Industry Association noted that prices for downstream products in the photovoltaic (PV) industry chain are once again trending downward. Downstream enterprises are increasingly stringent in controlling raw material costs, with polysilicon procurement prices being continuously lowered. Losses have reached a level unacceptable to the vast majority of polysilicon firms, prompting them to resist further price reductions. In response to this extreme market situation, some polysilicon companies are considering advancing their scheduled maintenance for the third quarter to the second quarter or making temporary adjustments to their production loads based on actual order situations.
As of now, all domestic polysilicon producers in operation are essentially running at reduced capacities. Two companies that originally planned to increase output this month have largely canceled their expansion plans, while three companies on the verge of maintenance have also begun gradually reducing their raw material inputs. Consequently, it is anticipated that domestic polysilicon production in May will decrease to around 96,000 tons, a month-on-month decline of approximately 3%, and the number of operational enterprises may shrink to around 10 in the second quarter.
