Economic Observer reporter Zou Yongqin

On April 13, 2026, polysilicon returned to the market view through a joint surge in stocks and futures.

On that day, in the futures market, all polysilicon futures contracts for 2026 hit the daily limit up, and the main contract surged 9% to 34770 yuan/ton; In terms of the stock market, sector leader Daquan Energy (688303. SH) surged 12.16% at one point, and eventually closed with a 7.93% increase. Other companies such as Tongwei Shares (600438. SH) and Hongyuan Green Energy (603185. SH) also saw significant increases in volume.

Does this mean that after nearly four months of sharp decline, polysilicon is returning as the king?

Skyrocketing And Plummeting

As a benchmark for the "anti involution" of the photovoltaic industry, the price of polycrystalline silicon performed sharply last year, with the main contract price rising from the lowest of 30400 yuan/ton in June 2025 to 61985 yuan/ton in December, doubling in half a year and receiving widespread market attention.

But starting from 2026, the price of polycrystalline silicon has experienced a sharp decline: the main contract fell 18.61% in January, 1.37% in February, 24.29% in March, and 8.74% in April (as of the close of April 10). The lowest price on April 10 was 31070 yuan/ton, which is close to halving from 61985 yuan/ton in December last year. It was not until April 13th that the 'Jedi Counterattack' was launched.

There are different opinions in the market regarding the sharp decline in polysilicon prices since the beginning of this year. For example, Wang Yongliang, the Chief Operating Officer of one of the leading companies in the polycrystalline silicon industry, Xiexin Technology (03800. HK), stated at the company's 2025 annual performance briefing on March 31 that the first quarter is the off-season for the photovoltaic industry, and the impact of related policies such as export tax rebates is the main reason for the recent decline in silicon material prices.

In fact, polycrystalline silicon is in the upstream stage of the photovoltaic industry, followed closely by silicon wafers, solar cells, modules, and other stages. From the comprehensive price index (SPI) of the photovoltaic industry in various links, Wind data shows that as of April 7th this year, SPI (polycrystalline silicon) has fallen by 32.74%, SPI (silicon wafer) has fallen by 19.82%, but SPI (solar cell) has risen by 3.05%, and SPI (module) has risen by 7.73%.

That is to say, the factor of "off-season in the photovoltaic industry" cannot fully explain why polysilicon prices led the decline of the entire photovoltaic industry, especially the reason for the rapid transition from a sharp rise to a sharp decline.

In the view of Sun Weidong, Chief Analyst of Nonferrous Metals at Dongzheng Derivatives Research Institute, it was the event where the State Administration for Market Regulation held talks with the Photovoltaic Association and major enterprises in early January 2026 and reported monopoly risks, which changed the operating pattern of polycrystalline silicon. In his research report published on April 9th, he believed that after the interview, there was internal division within the polysilicon alliance, with some companies shipping at low prices on a large scale, and the industry returning to fundamental logic; Although the spot price has been falling all the way to about 35 yuan/kg, buyers are still testing the price bottom line and continuing to push down the price.

Market data also shows that polysilicon futures started this round of sharp decline on January 7th.

Inventory High Pressure

But another leading enterprise in the polysilicon industry, Daquan Energy, has a different view. The relevant staff of the company's secretary's office stated in a telephone consultation with reporters that the current price fluctuations are mainly affected by the market supply and demand situation. From the current situation, the inventory level of polycrystalline silicon is indeed at a relatively high level.

Ji Yuanfei, an analyst at Guangfa Futures Research Institute, also told reporters that since the beginning of this year, while prices in other fields of photovoltaics have only slightly decreased or even increased, the price of polycrystalline silicon has plummeted due to various reasons. For example, at the beginning of this year, while other segments of the photovoltaic industry were struggling near the breakeven line, the polycrystalline silicon segment had higher profits due to last year's price surge, but this also led to significant room for decline.

Of course, the core reason is that polycrystalline silicon is currently facing the dilemma of oversupply and high inventory, "said Era Fei. Market data also shows that since 2026, China's polysilicon inventory has continued to increase. In early January, the inventory was about 302000 tons, in early February it increased to 341000 tons, and in early March it slightly increased to 348000 tons.

Regarding this, Ji Yuanfei further stated that the main reason for the continuous increase in inventory is oversupply. Although the production of polysilicon in the first quarter was not high, the weaker demand led to the continuous accumulation of inventory. In addition, in the absence of obvious signs of improvement in terminal demand, the silicon wafer, battery cell, and component links are mainly focused on digesting inventory, with low purchasing enthusiasm, which also makes it difficult to dispose of upstream inventory accumulation.

In fact, on April 8th, the Silicon Industry Branch of the China Nonferrous Metals Industry Association (referred to as the "Silicon Industry Branch") publicly announced that polysilicon production would be reduced by 8% in April. In addition, according to data from Shanghai Nonferrous Metals Network (SMM), the production schedule of silicon wafers in April also slightly decreased by 0.57% to 48.73GW, while the production schedule of solar cells decreased by 4% to 44.3GW, and the production schedule of components in April fell sharply by 22% to 32.15GW. That is to say, the overall downstream production scheduling is in an inverted pyramid shape, which will further pressure the prices of various links in the industrial chain.

In a research report on April 12th, Zhongtai Futures emphasized that under the pressure of high inventory and weak domestic demand, the total demand for polysilicon will come under pressure and fall after the end of the export rush. Therefore, the current main trading logic for polycrystalline silicon is: pessimistic industry expectations and collapse of spot prices.

Prisoner's Dilemma

According to the production schedule, except for one top enterprise planning maintenance, most of the other enterprises will maintain their original operating rates. It is expected that the polysilicon production in April will be about 85000 tons to 86000 tons, a decrease of about 8% compared to the previous month. On April 8th, the Silicon Industry Branch adjusted the polysilicon production in April through data statistics.

But while the market agrees with the Silicon Industry Association's view of "reducing production in April", it generally expects the possibility of further production increases after April. For example, CSI Futures believes that 'companies with cost advantages have the potential to increase production'.

The reasons for increasing production may be as follows: first, to maintain or increase market share; second, to reduce production costs; third, to implement a policy of reducing production capacity through competition. Ji Yuanfei said that the market expects production to further increase after April. Against the backdrop of no significant recovery in demand, increasing operating rates is indeed expected to reduce unit costs, but it also opens up space for spot prices to fall.

Overall, the industry is now returning to a market-oriented clearing mode. Against the backdrop of overcapacity, everyone does not want to be cleared, leading to the worst outcome of the 'prisoner's dilemma' through mutual competition. From the perspectives of supply and demand, price, and cost, when prices fall below the cash cost line or even below, it can force companies to reduce production, "said Ji Yuanfei.

The reporter noticed that the current spot price of 35.15 yuan/kg is widely believed to have fallen below the industry average cash cost, but there has been controversy over the specific amount of this industry average cash cost.

Anyway, leading enterprises represented by Daquan Energy will have relatively favorable cash costs in the industry. According to the announcement from Daquan Energy in March, the unit cash cost of polysilicon is 33.95 yuan/kg.

Against this backdrop, on the morning of April 13th, a small essay appeared in the market, stating that silicon material giants including Tongwei Shares and Daquan Energy held a closed door meeting in Chengdu in early April. The core goal of the meeting was to address the crisis of silicon material prices falling below the industry average cost line, and to solve the current "prisoner's dilemma" in the industry through collective action by controlling production and prices. On that day, polycrystalline silicon emerged from a long lost surge in stock and futures prices.

So, is the content of this short essay true? The reporter contacted relevant listed companies by phone on April 13th for verification. The staff of Tongwei Corporation stated that they have also seen the above market news, but they are not sure if a relevant meeting has really been held, and the specific situation is still under investigation; The staff of Daquan Energy stated that they do not understand or evaluate this market information, and investors are advised to refer to the official information released by the company.

Ji Yuanfei is skeptical about the authenticity of the aforementioned essay. She believes that, based on the current situation, if the industry adopts a market-oriented clearance model, the path to reducing production capacity should be to force a decrease in output due to a decline in prices, thereby stopping the decline and recovering prices; It is difficult to regulate production and prices through inter enterprise cooperation.

In the context of oversupply, prices are expected to continue to operate at a low level. Only when high cost enterprises face tight cash flow due to long-term losses, may they be forced to reduce production. If prices want to stabilize or even rebound, they need to wait for the supply-demand relationship to re balance or for inventory to be substantially reduced, "said Ji Yuanfei.

Regarding the future trend of polycrystalline silicon, Ji Yuanfei stated that in the medium to long term, the growth in electricity demand brought about by energy security and AI development is indeed expected to drive the demand for polycrystalline silicon, but so far, the above factors have not released significant increments; In the short term, the pressure of oversupply and high inventory has not yet eased. Whether prices can stabilize or even rebound depends on whether the price decline can force production reduction or capacity clearance, or whether demand can further increase and drive inventory digestion.