China Solar Silicon Falls to Lowest Since 2020 Amid Overcapacity

(Bloomberg) -- Solar silicon prices in China plunged to a three-year low as overcapacity and fierce competition slash profits across the industry. 

Average prices of polysilicon dropped as much as 20% in the past week, according to a statement by the China Silicon Industry Association. Prices are at the lowest level since July 2020, according to data compiled by BloombergNEF. 

Polysilicon is an ultra-refined form of silicon and the key material in solar panels. Prices soared in 2021 as a surge in demand led to shortages, and producers responded with several new factories that have come online in the past year, flooding the market with cheap new supply. 

Now producers are seeing losses across the board, and some companies are unwilling to sell as buyers request extremely low prices, the silicon association said. 

China’s solar manufacturers are suspending production, cutting jobs and shelving investment plans to survive the price war, with polysilicon and wafer producers among the worst hit. 

©2024 Bloomberg L.P.