Silicon Industry in China Faces Severe Supply-Demand Imbalance as Prices Fall Below Cost
Industry Association Survey Reveals Widespread Losses Across Polysilicon Supply Chain
China silicon industry is experiencing a severe supply-demand imbalance with prices falling below production costs, leading to widespread losses across the entire supply chain, according to a survey by the China Nonferrous Metals Industry Association Silicon Industry Branch.
The Crisis
The association survey of enterprises in Baotou, Inner Mongolia revealed:
- Market supply and demand severely imbalanced
- Prices have fallen below production cost lines
- All segments of the supply chain face universal loss-making pressure
- Companies are calling for industry guidance to curb disorderly competition
Industry Calls to Action
Enterprises are demanding:
- Industry associations and government to strengthen guidance
- Suppress disorderly and destructive competition
- Create a fair market environment
- Help the industry emerge from its downturn as quickly as possible
Standards Concern
A particularly contentious issue is standard-setting:
- Current standards may use a one-size-fits-all approach
- Different product types, process routes, and operating rates need differentiated treatment
- Standards should truly eliminate backward capacity while encouraging advanced producers
- Avoiding blanket rules that punish efficient operators
Broader Context
The silicon industry crisis is part of a larger pattern in Chinese manufacturing:
- Overcapacity in solar panel manufacturing has led to price wars globally
- Similar dynamics affect lithium battery materials, steel, and cement
- Government stimulus and industrial policy have encouraged excess capacity
- The downturn reflects both domestic oversupply and weakening global demand
What It Means
For investors and industry observers, the silicon industry distress signals ongoing challenges in China clean energy supply chain. While prices are depressed, the consolidation phase may create opportunities for well-capitalized companies that survive the downturn. The government response to industry calls for intervention will be a key indicator of how Beijing plans to manage industrial overcapacity going forward.
Source: 36Kr / Jiemian https://www.jiemian.com/article/14210609.html