Chinese firms dominate polysilicon production with a 93.5% share, but overproduction led to a 400,000 MT stockpile at the end of 2024
Despite output cuts by 33 firms, prices remain below cost due to persistent oversupply and inventory
Eliminating overcapacity risks a shortage by 2028, cautions Bernreuter Research in a new report
The global polysilicon market could face a significant shortage by 2028 if excess production capacity is phased out, warns Bernreuter Research in its latest report.
Chinese polysilicon manufacturers represented a combined 3.25 million metric ton (MT) production capacity as of the end of 2024, accounting for 93.5% of the global output and 95% of solar-grade polysilicon.
Nearly 2/3rds of the newly added polysilicon capacity has been established by China’s top 4 manufacturers. Leading producer Tongwei’s aggressive strategy to capture additional market share has fallen short, according to the report, as many new entrants are supported by financially strong parent companies.
Despite an agreement among 33 major Chinese polysilicon and solar companies to curtail production in an attempt to ease oversupply, the initiative failed to produce meaningful results.
As a result, by the end of 2024, polysilicon inventories had surged to 400,000 MT, with market prices in China dropping below $4.50/kg – undercutting the cash costs of most producers and pushing them into losses.
This ‘high mountain’ of inventory is expected to cap polysilicon prices in China below $5.00/kg through 2027, caution report writers.
Prices can only go up if manufacturers drastically bring down supply, or the price of silicon metal feedstock rebounds strongly, according to Bernreuter Research’s Founder, Johannes Bernreuter.
“The Chinese polysilicon industry will face a difficult balancing act in the next three years. If too much overcapacity is eliminated, the market could run into a new shortage by 2028,” he writes in Bernreuter Research’s new report titled Polysilicon Market Outlook 2029.
Nonetheless, he forecasts annual solar installations in 2025 to expand to 720 GW DC, lowering it from the previous projection of 750 GW DC, which in the high-case scenario can grow to 760 GW DC owing to an installation rush in China in May 2025. China exceeded the milestone 1 TW capacity last month (see China Solar Installations: From 100 MW In 2009 To 1 TW In 2025).
The complete report can be purchased from Bernreuter Research’s website for $2,990.
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