China Silicon Industry Faces Severe Oversupply as Prices Fall Below Production Costs

Silicon Supply Chain Crisis Deepens as Market Imbalance Worsens

China Nonferrous Metals Industry Association Silicon Branch has conducted an in-depth investigation in Baotou, Inner Mongolia, revealing alarming conditions across the silicon industry supply chain.

Critical Findings

Multiple enterprises reported severe supply-demand imbalances with prices having fallen below production cost lines. Every segment of the supply chain is facing widespread losses. The situation has become critical enough that companies are urgently calling for government intervention.

Industry Appeals

Enterprises are universally appealing for:

• Stronger industry association and government guidance to curb disorderly competition
• A fair market environment to help the industry emerge from its current trough
• Differentiated standards that account for different product types, process routes, and operating rates rather than one-size-fits-all approaches
• Standards that truly eliminate backward capacity and encourage advanced production

Market Context

The silicon industry crisis reflects broader challenges in China industrial sectors where aggressive capacity expansion has led to severe overcapacity. The falling prices below cost signals a market correction that could lead to significant industry consolidation.

This is particularly significant for the clean energy sector as silicon is a critical material for solar panels and semiconductor manufacturing.

Source: 36Kr via Jiemian https://www.36kr.com/newsflashes/3752201176744455