Economic Outlook - The Central Political Bureau meeting on July 30, 2025, maintained a "steady progress" policy tone, emphasizing the need to stabilize employment, expand domestic demand, and ensure market expectations[3] - The meeting acknowledged the positive effects of policies implemented this year, while also recognizing the risks and challenges facing economic operations[3] - The focus has shifted from external uncertainties to strengthening domestic economic activities, with a call to "concentrate efforts on doing our own business well" in response to international trade disputes[3] Policy Measures - The meeting proposed to continue and enhance macroeconomic policies, including more proactive fiscal policies and moderately loose monetary policies, to fully unleash policy effects[4] - It emphasized the importance of improving the efficiency of fund usage while ensuring liquidity remains ample, with local government special bonds expected to continue to play a significant role[4] - The meeting reiterated the need to stimulate private investment and improve consumer demand through various measures, including long-term special bonds for consumption upgrades[5] Supply-Side Adjustments - The meeting highlighted the need for structural adjustments on the supply side, aiming to regulate chaotic competition among enterprises and promote orderly exit of outdated production capacity[5] - The "anti-involution" policy was emphasized again, which is expected to support industrial product prices and influence nominal economic trends in the medium term[6] - The anticipated adjustments in supply-side policies are expected to be more moderate compared to previous rounds, with a longer timeline for price normalization[6] Real Estate and Capital Markets - The meeting indicated a focus on high-quality urban renewal and maintaining stability in the real estate market, with a low probability of large-scale stimulus policies in the sector in the near future[7] - The capital market's positive outlook was reinforced, with a commitment to enhance its attractiveness and inclusivity, supporting a stable recovery trend[7] - The report suggests that the nominal GDP growth in the third quarter is expected to gradually bottom out, providing fundamental support for the equity market[8]

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core Views - For industrial silicon, although the spot and futures prices have rebounded recently, the oversupply situation is difficult to improve significantly in the short term, and the selling pressure after the price rebound will suppress the silicon price. The operating range is expected to be between 7,500 - 9,000 yuan/ton [3]. - For polysilicon, the supply - side structural adjustment has brought positive sentiment, and the short - term futures market is expected to be strong. However, there is a high risk of inventory accumulation, and the upward driving force is limited [3]. 3. Summary by Directory 3.1 Industry Chain Price Review - **Industrial Silicon**: The futures and spot prices of industrial silicon have shown a resonance upward trend. For example, the industrial silicon futures main contract closed at 7,980 yuan/ton on July 4, 2025, with different price changes in various regions and grades [8]. - **Polysilicon**: The price of polysilicon has rebounded from a low level. For instance, the N - type material price increased from 33.50 yuan/kg on June 27 to 34.50 yuan/kg on July 4 [8]. - **Silicon Wafer**: The demand for silicon wafers is insufficient, the price has decreased across all sizes, and the production schedule has dropped to about 52GW [3]. - **Battery Cell**: The production schedule of battery cells in July is expected to drop to about 54GW, and the oversupply situation remains unchanged [3]. - **Component**: The terminal demand for components has been severely overdrawn, new orders are limited, and the price is on a downward trend [3]. - **Organic Silicon**: The price of organic silicon continues to decline. As of July 4, the average price of DMC remained unchanged at 10,450 yuan/ton, while the average prices of 107 glue and silicone oil decreased [96]. - **Silicon Aluminum Alloy**: The price of silicon - aluminum alloy has declined. As of July 4, the average price of ADC12 remained unchanged at 20,100 yuan/ton, and the average price of A356 decreased by 0.47% [109]. 3.2 Supply - Side Analysis - **Industrial Silicon** - **Cost**: The power cost in the southwest production area is gradually decreasing, and the prices of raw materials such as silicon coal and silicon stone are also falling, providing insufficient support for the silicon price [3]. - **Supply**: The number of open furnaces in some regions has increased, and the overall supply is expected to rise. For example, in the week of July 3, the number of open furnaces of silicon enterprises increased by 13 units [37]. - **Demand**: The demand from polysilicon enterprises has increased, while the demand from organic silicon and silicon - aluminum alloy industries is average or weak [3]. - **Inventory**: The standard futures warehouse receipts are flowing out, but the inventory is still at a high level [3]. - **Polysilicon** - **Supply**: In July, some enterprises increased production, and some carried out maintenance. After offsetting, the monthly output is expected to increase to about 110,000 tons [3]. - **Demand**: The terminal demand for photovoltaic has been overdrawn, the domestic orders have decreased significantly, and the overseas orders are relatively stable. The demand for polysilicon is weak [3]. - **Inventory**: As of July 3, the total polysilicon inventory was 272,000 tons, and as of July 4, the number of polysilicon futures warehouse receipts was 2,780 lots [3]. 3.3 Demand - Side Analysis - **Organic Silicon**: The start - up of the organic silicon industry has recovered, but it is still mainly in a state of reduced production. The demand is weak, and the price is under pressure [89][93]. - **Silicon Aluminum Alloy**: The start - up rate of the silicon - aluminum alloy industry has rebounded slightly, but the demand is still weak, and the price has declined [104][109]. 3.4 Inventory Analysis - **Industrial Silicon**: As of July 3, the social inventory of industrial silicon (warehouse inventory + delivery warehouse) was 552,000 tons, and the total factory inventory of the three major production areas was 201,000 tons. As of July 4, the number of registered exchange warehouse receipts was 51,701 lots, equivalent to 258,500 tons of spot [119].

Core Viewpoint - Recent rebound in polysilicon prices is observed, driven by stable production and inventory levels, along with policy catalysts, despite weak downstream demand [1][2][4]. Group 1: Polysilicon Price Trends - As of July 2, the transaction price range for N-type polysilicon is between 34,000 to 38,000 yuan per ton, with an average price of 34,700 yuan per ton, reflecting a slight week-on-week increase of 0.87% [1]. - On July 3, the main futures contract for polysilicon reached a limit up, with a price increase of 2.14%, settling at 35,050 yuan per ton [1]. - The market is experiencing a tentative price increase due to a combination of previously deferred orders being executed at higher prices and a few new orders being priced higher [3][4]. Group 2: Supply and Demand Dynamics - The monthly production of polysilicon has remained stable at around 100,000 tons, aligning with demand and avoiding additional inventory pressure [4][8]. - The Chinese government is implementing measures to adjust supply-side dynamics and control competition below cost, which is positively influencing market expectations [4]. - The average production cost for the polysilicon industry is estimated between 40,000 to 46,000 yuan per ton, with cash costs around 35,000 to 37,000 yuan per ton, indicating that prices need to rise to at least 38,000 yuan per ton for profitability [5][7]. Group 3: Market Outlook - The current price increase is expected to last for one to two weeks, contingent on downstream demand transmission [5]. - The polysilicon market is projected to face challenges in fully digesting existing inventory due to increased production and stable demand levels [8][9]. - The upcoming production increase in July is attributed to the onset of the wet season, leading to lower electricity costs and potential resumption of production in the polysilicon sector [8]. Group 4: Impact of External Factors - The recent rise in Hong Kong's solar energy stocks is linked to the U.S. Senate passing a bill that does not impose tariffs on imported components, which is favorable for the Chinese solar industry [11]. - The potential for Chinese companies to establish manufacturing facilities in the U.S. faces challenges due to policy uncertainties and high costs, which may hinder competitiveness [11].

Core Viewpoint - The polysilicon market shows signs of recovery with slight price increases, driven by stable production levels and government measures to control competition and support the industry [2][3]. Price Trends - The transaction price range for n-type polysilicon is between 34,000 to 38,000 yuan per ton, with an average price of 34,700 yuan per ton, reflecting a slight week-on-week increase of 0.87% [1]. - The average transaction price for n-type granular silicon remains stable at 33,500 yuan per ton [1]. Market Dynamics - The polysilicon market has seen a slight recovery, with some previously delayed orders being renegotiated at higher prices, despite most companies not securing significant new orders [2]. - The average price of polysilicon has been below the industry average cost for over a year, leading to the shutdown of four companies in the first half of this year and a total of nine since the beginning of 2024 [2]. Production and Supply - As of this week, the number of operating polysilicon companies in China has decreased to nine, with two additional companies recently ceasing operations without clear plans for resumption [3]. - Domestic polysilicon production in June was approximately 102,000 tons, remaining stable and matching demand, with a total production of about 596,000 tons in the first half of the year, a year-on-year decrease of 44.1% [3]. Future Outlook - The forecast for global polysilicon demand in 2025 is around 1.4 million tons, with domestic demand expected to be approximately 1.3 million tons [3]. - Without production increases from domestic polysilicon companies, the total output for the year is expected to be around 1.2 million tons, with inventory consumption of about 100,000 tons in the second half of the year [3]. - The industry must control capacity increases and push for the exit of outdated production capacities to fundamentally resolve supply-demand conflicts and stabilize prices across the photovoltaic industry chain [3].