Source: Securities Times Author: Liu Canbang of Company E

In the face of the dilemma of polysilicon prices falling below the cost line of first-tier manufacturers, long-term low sideways, and continuous "bleeding" of enterprises, the "anti-involution" of the photovoltaic industry has already begun. On the evening of December 24, two leading polysilicon companies made a blockbuster sale.

Tongwei has an annual output of 900,000 tons of high-purity crystalline silicon

Orderly production cuts

Tongwei Co., Ltd. (600438) issued an announcement on the technical transformation and overhaul of some high-purity crystalline silicon projects and the orderly reduction of production on its official WeChat public account.

According to the announcement, Tongwei Co., Ltd. is a leading global high-purity crystalline silicon enterprise, with a production capacity of more than 900,000 tons of high-purity crystalline silicon under Yongxiang Co., Ltd., distributed in the three provincial-level administrative regions of Sichuan, Yunnan and Inner Mongolia, with a significant competitive advantage in terms of scale, cost, technology and market, and has achieved a market share ranking first in the world for many years.

Tongwei Co., Ltd. said that at present, affected by the dry period in the southwest region in winter, the month-on-month increase in electricity prices, considering that the overall market of the photovoltaic industry continues to be in the bottom adjustment stage, the company's Yongxiang Co., Ltd. actively responds to the spirit of the Central Economic Work Conference, is committed to breaking the "involution" competition, promoting the long-term healthy development of the photovoltaic industry, and gradually arranging Yunnan Tongwei High Purity Crystalline Silicon Co., Ltd., Sichuan Yongxiang Polysilicon Co., Ltd., Sichuan Yongxiang New Energy Co., Ltd., Sichuan Yongxiang Energy Technology Co., Ltd. 4 high-purity crystalline silicon production companies, according to the company's overall production and operation plan to carry out technical transformation and maintenance work, phased and orderly production reduction and production control, the follow-up specific resumption of production arrangements will be based on the project site power price changes and market conditions overall planning.

According to the announcement, the technical overhaul and production reduction will help Tongwei reduce the operating loss of high-purity crystalline silicon business in the current market environment, and is expected to have a positive impact on the company's overall production, operation and profit.

Tongwei also mentioned that the company will conduct a comprehensive and systematic investigation and maintenance of the production equipment of the production bases involved during the shutdown and maintenance, and carry out some technical transformation work, and at the same time coordinate and organize technical training for employees of relevant production bases, so as to continue to maintain and enhance the company's high-purity crystalline silicon project in the industry's leading competitiveness.

Daqo Energy has an annual output of 305,000 tons of high-purity polysilicon

Phased production reduction and maintenance

Coincidentally, Daqo Energy also issued a notice on its official WeChat public account on Daqo Energy's gradual start of phased production reduction and maintenance of some high-purity polysilicon production lines.

According to the content of the notice, Daqo Energy (688303), as a leading professional manufacturer of polysilicon in China, is mainly used to process solar photovoltaic products such as silicon ingots, silicon wafers, cells and battery modules, and is the front-end supplier of the photovoltaic industry chain. At present, the company has built two production bases in Shihezi, Xinjiang and Baotou, Inner Mongolia, and has formed an annual production capacity of 305,000 tons of high-quality, low-energy, low-cost high-purity polysilicon, and is one of the major market participants in the polysilicon industry.

Daqo Energy said that at present, the market pattern of polysilicon supply and demand imbalance has not been fundamentally improved, and the industry as a whole continues to face severe challenges of comprehensive losses. In order to strictly implement the spirit of the Central Economic Work Conference, standardize the behavior of enterprises, prevent "involution" vicious competition, and promote the healthy and sustainable development of the photovoltaic industry, the company will gradually start the phased maintenance of high-purity polysilicon production lines in Xinjiang and Inner Mongolia production bases, and orderly reduce and control production of some production lines.

"During the production reduction and maintenance, the company will carry out systematic and comprehensive investigation and maintenance of the production equipment involved, and carry out some technical transformation work in a timely manner." Daqo Energy also mentioned that the company will coordinate and organize relevant employees to carry out career counseling and technical training in an orderly manner to continuously enhance the company's leading competitiveness in the industry. The follow-up company will resume production according to market changes, and disclose relevant information in a timely manner according to the follow-up situation.

According to Daqo Energy's analysis, the production reduction and maintenance work will lead to a reduction in the company's effective production capacity of high-purity polysilicon, and the production and sales of the company's main line products will be reduced accordingly, but from an overall point of view, the production reduction and maintenance work will help reduce operating costs and reduce the company's operating losses while improving the future stability and product quality of production equipment, so it is expected that the production reduction and maintenance will not have a significant impact on the company's production and operation.

Prices are expected to gradually return to rationality

At present, there are five first-tier polysilicon manufacturers, including Tongwei Co., Ltd., GCL Technology, Xinte Energy, Daqo Energy and Oriental Hope. In addition, as of the close of trading on December 24, the total market value of Tongwei shares was 107.4 billion yuan, and the total market value of Daqo Energy was 54.45 billion yuan.

The reporter noted that Tongwei's production reduction plan was expected as early as possible, and in the institutional survey in November, Tongwei revealed that the southwest region entered a dry period in December, and electricity prices rose month-on-month and will reach an annual high. At that time, Tongwei said that considering that the current polysilicon price is still consolidating at the bottom, the company is studying a production reduction plan, and will dynamically adjust the production arrangement according to market conditions, and schedule production according to the most economical production configuration.

In addition, according to Tongwei's judgment, in the short term, the downstream wafer segment has sufficient polysilicon inventory in hand, the production schedule has declined month-on-month, and the overall transaction sentiment of the polysilicon market is relatively light, but considering that the price of polysilicon has bottomed out, the price downward space is limited, and it is expected to maintain stable operation in the short term. Looking ahead, the destocking phase of polysilicon will be one of the necessary conditions for price rebound, and industry self-discipline is expected to accelerate this process.

According to the data released last week by the Silicon Branch of the China Nonferrous Metals Industry Association, polysilicon prices continued to be flat, of which the average transaction price of N-type re-feeding materials was 40,300 yuan/ton; The average transaction price of N-type granular silicon was 37,000 yuan/ton; The average transaction price of P-type polysilicon was 33,100 yuan/mt. According to the agency's data, almost all polysilicon production enterprises are in a state of maintenance or load reduction, and the monthly production schedule of polysilicon has further declined, and the output is expected to be around 100,000 tons this month.

The Silicon Industry Branch expects that polysilicon prices are expected to gradually return rationally in the future, firstly, the sharp reduction in market supply in the short term will have strong support for market prices, and the centralized procurement before the Spring Festival may cause a phased supply and demand tension; Secondly, before the end of the year, polysilicon futures will be listed, and the futures and spot traders will be driven to enter the industry for procurement, and the futures reservoir will have a positive impact on market supply and demand and spot prices. Finally, the positive impact of industry self-discipline and domestic industrial policies on the market continues to be positive for long-term market supply and demand.

Another industry body, InfoLink, has a more cautious view, which believes that there will be many uncertainties in 2025, and the production restrictions brought about by the industry's self-regulatory behavior still need time to observe the implementation ability. The current price has been in a state of trough grinding, in the case of sideways, the company's follow-up strategy changes and price trends will be highly correlated, so the follow-up still needs to actively follow up the strategy adjustment of buyers and sellers, especially during the Spring Festival in January, stocking up in advance may affect the market trend.