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Solar power plant in California, United States, completed by Hanwha Q CELLS. (Photo=Hanwha Q CELLS) |
[Alpha Biz= Paul Lee] Prices of polysilicon, a key raw material for solar panels, are sharply declining despite rising costs for other chemical products, highlighting growing concerns over oversupply in the global market.
According to Chinese market research firm SunSirs, spot prices for polysilicon in China fell to around CNY 41,000 per ton as of March 31, down 23.1% from CNY 53,333 at the beginning of the month. A separate report by OPIS forecasts that prices for monocrystalline polysilicon used in solar ingots could drop to the low CNY 30,000 range—approaching historical lows.
Polysilicon is a critical material used in solar power generation and semiconductor wafers. Its production is energy-intensive, requiring high levels of electricity to refine silicon into high-purity form.
China dominates the global polysilicon market, accounting for approximately 1.32 million tons of output in 2024—about 78% of total global supply. Despite rising electricity costs linked to geopolitical tensions in the Middle East, prices have continued to fall due to excess inventory and aggressive capacity expansion by major producers such as Tongwei and GCL Technology.
Industry estimates suggest that polysilicon inventories in China have reached around 500,000 tons, reflecting a mismatch between supply growth and slower-than-expected demand expansion, compounded by tighter U.S. restrictions on Chinese solar materials.
Market participants warn that continued oversupply and potential exports of excess Chinese inventory could further pressure global prices and profitability.
South Korea’s domestic polysilicon industry has already been significantly impacted. Hanwha Q CELLS exited the polysilicon business in 2020, while OCI Holdings has shifted production to overseas locations such as Malaysia.
The ongoing price decline is expected to weigh on the broader solar supply chain, even as demand for renewable energy continues to grow globally.
알파경제 Paul Lee 특파원(hoondork1977@alphabiz.co.kr)
