Report Date - The report is dated June 18, 2025 [2] Market Performance and Outlook Market Performance - The main contract of polysilicon fluctuated at a low level. The closing price of PS2508 was 34,010 yuan/ton, with a gain of 1.93%. The trading volume was 62,835 lots, and the open interest was 51,277 lots, a net decrease of 5,586 lots [4] Outlook - The supply-demand contradiction has not further intensified after the end of the "rush installation," but the terminal pressure will gradually be transmitted upstream to the supply side. The weekly output in the second week of June remained at 22,000 tons, and the monthly output is expected to remain at around 100,000 tons. It is difficult to increase production during the wet season, which will relieve the potential supply pressure in the distant months. If production cuts are implemented, the current spot and futures prices will be supported [4] - The weak reality is mainly reflected in the fact that the "rush installation" of downstream photovoltaic terminals is gradually coming to an end, and the terminal photovoltaic demand has dropped to around 40GW. Although the weekly data of silicon wafers and cells has not declined rapidly, the inventory has been accumulating for 9 consecutive weeks. There are few positive news on the demand side during the policy vacuum period [4] - The 07 contract is currently at a discount to the price range of reclaimed feedstock, reflecting the market's pessimistic expectations. The resistance to further decline is increasing. However, if the production cuts do not increase, the fundamentals will not provide a continuous driving force for a rebound, and the contract will mainly operate weakly within a range [4] Market News - As of June 17, the number of polysilicon warehouse receipts was 2,600 lots, unchanged from the previous trading day [5] - The transaction price range of n-type reclaimed feedstock was 36,000 - 38,000 yuan/ton, with an average transaction price of 37,500 yuan/ton, unchanged from the previous period. The transaction price range of n-type granular silicon was 34,000 - 35,000 yuan/ton, with an average transaction price of 34,500 yuan/ton, unchanged from the previous period. The transaction price range of p-type polysilicon was 30,000 - 33,000 yuan/ton, with an average transaction price of 31,300 yuan/ton, unchanged from the previous period [5]

Summary of the Conference Call on Polysilicon Market Outlook and Industry Supply-Demand Assessment Industry Overview - The conference call focuses on the polysilicon industry, particularly in China, and its supply-demand dynamics for 2025 [1][2][4]. Key Points and Arguments Supply and Production - Due to production cuts in Xinjiang and Ningxia, polysilicon output is expected to drop to 90,000 tons in May 2025, with potential delays in the resumption of production in Yunnan and Sichuan until June or July [1][2]. - The overall polysilicon production capacity is approximately 2.9 million tons, but the operating rate has fallen to 34%, with monthly production around 95,000 tons in April, expected to decrease further [14]. - Inventory levels are high, with upstream polysilicon plants holding about 260,000 tons and total industry inventory around 360,000 to 380,000 tons, equivalent to three months of demand [9][14]. Demand Trends - China's photovoltaic (PV) installation growth is projected to enter a downward cycle starting in 2024, with a further decline expected in 2025, leading to an estimated annual new installation capacity of 240 GW, down by approximately 40 GW year-on-year [1][3][4]. - The demand for polysilicon is primarily driven by the PV installation sector, but recent policy changes, including the requirement for new grid-connected PV projects to participate in electricity spot trading, may negatively impact project profitability and lead to a demand vacuum in Q3 2025 [3][4]. Price Dynamics - The polysilicon market is experiencing downward pressure on prices due to weak supply and demand. Current market conditions suggest that both spot and futures prices may fluctuate [6][9]. - The price of polysilicon is currently under pressure, with expectations that it may drop to around 33,000 to 34,000 yuan per ton in the second half of the year, as the cash cost line is estimated to be around 35,000 yuan [16][21]. Market Sentiment and Future Outlook - The market sentiment is cautious, with expectations of continued price declines in the short term due to high inventory levels and weak demand [9][17]. - The establishment of a production reduction alliance among major polysilicon manufacturers is still under negotiation, which could potentially stabilize prices if implemented effectively [20]. Additional Insights - The conference highlighted the importance of monitoring the resumption of production at various plants and the actual implementation of production cuts by major manufacturers, as these factors will significantly influence future market trends [7][20]. - The call also discussed the potential for supply-side reforms in the polysilicon industry, including capacity consolidation and the elimination of outdated production capacity, which could help restore price stability and improve profitability in the long term [12][13]. Conclusion - The polysilicon industry is currently facing significant challenges, including high inventory levels, declining demand, and price pressures. The outlook for 2025 suggests a continued downward trend unless effective measures are taken to address supply-side issues and stabilize market conditions [21].

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **polysilicon industry** and its current market dynamics, including supply and demand, pricing trends, and the operational status of key companies like Tongwei, Daqo, and Xinte [1][5][17]. Core Insights and Arguments - **Polysilicon Pricing Trends**: The spot price of polysilicon has shown significant volatility, with dense material prices around 37,000 CNY/ton and by-product material prices nearing 39,000 CNY/ton. The actual delivery price is close to 40,000 CNY/ton, but recent lows have been reported at 34,000 to 35,000 CNY/ton. If futures prices fall below 30,000 CNY/ton, it could lead to industry-wide cash losses [1][2][4]. - **Low Operating Rates**: Major companies like Tongwei, Daqo, and Xinte are operating at around 30% capacity due to a strategic shift towards reducing losses and maintaining cash flow. This low operating rate is a response to previous cash loss experiences [1][5][9]. - **Market Expectations**: There are expectations of a potential price increase in polysilicon futures as the delivery month approaches, with very few deliverable products available. This scarcity could favor long positions in the market [1][4][6]. - **Self-Regulation and Policy Expectations**: The industry has not yet reached the self-regulatory pricing goals set for December 2024, leading to ongoing low prices. There are rumors of potential self-regulatory measures and government policies aimed at stabilizing prices, which could impact future market dynamics [1][8][17]. - **Production Costs**: Tongwei's production base in Baotou has a cash cost of approximately 27,000 CNY/ton, while other bases in Yunnan and Sichuan are currently paused, with average cash costs expected to exceed 30,000 CNY/ton. Current product prices do not support the resumption of production at these bases [1][9][10]. Additional Important Insights - **Production and Inventory Levels**: In April, domestic polysilicon production was about 98,000 tons, expected to decrease to 96,000 tons in May. The number of operating companies has reduced to around ten, with an operating rate of 30-40% [3][12]. - **Market Demand**: The downstream demand for silicon wafers and modules remains stable, with April production levels around 60 GW, corresponding to a polysilicon demand of approximately 128,000 tons [3][12]. - **Company Performance**: Aiko Solar has seen a rapid increase in sales of its ABC modules in Europe, achieving a shipment of 4.5 GW in Q1 2025, a 40% year-on-year increase, and becoming the leading company in global BC module shipments [3][19]. - **Future Market Dynamics**: The polysilicon industry is currently in a phase of low prices and high inventory, which has prevented significant price increases. The market is expected to remain cautious, with companies closely monitoring water and electricity conditions and price trends [10][14][16]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the polysilicon industry.

Core Viewpoint - The polysilicon industry is facing significant cyclical challenges due to oversupply, leading to declining prices and increasing inventory levels, prompting companies to reduce production rates to manage costs and inventory [4][5][6]. Group 1: Market Conditions - The polysilicon market is experiencing a supply-demand imbalance, with prices dropping; for instance, the average transaction price for N-type polysilicon fell to 39,200 yuan/ton, down 5% from 41,500 yuan/ton at the beginning of 2025 [4][5]. - As of early May, polysilicon factory inventory reached approximately 257,000 tons, a high level compared to previous years [4]. - The main futures contract for polysilicon hit a historical low of 34,375 yuan/ton on May 8, indicating a downward trend in market prices [4]. Group 2: Company Strategies - Companies are actively seeking to reduce inventory by lowering production rates, with many polysilicon manufacturers in Xinjiang operating at below 50% capacity [5][6]. - Despite the challenges, companies maintain a positive outlook, believing that current difficulties are temporary and that the industry will eventually recover [6][10]. - Some companies are implementing measures such as rotating staff and maintaining basic salaries to manage costs while reducing production [7]. Group 3: Future Outlook - The polysilicon supply is projected to exceed demand by approximately 26,550 tons in 2025, with supply expected to be around 1,598,900 tons and demand at 1,333,400 tons [9]. - Xinjiang's electricity cost advantage, ranging from 0.22 to 0.38 yuan/kWh, is seen as a protective factor for local polysilicon companies against cost pressures [9]. - Companies believe that those who endure the current market conditions will benefit significantly when the market recovers [10]. Group 4: Role of Futures Market - The introduction of polysilicon futures has enhanced communication and collaboration between producers and traders, revitalizing the market [12][13]. - Many companies are now more open to working with traders, viewing them as a means to alleviate cash flow concerns and streamline sales processes [13]. - There is a growing interest among companies to establish themselves as delivery brands in the futures market, which could enhance their market opportunities and economic benefits [13][14].