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Global Polysilicon Market Faces Impending Oversupply in 2024: Bernreuter

Chinese polysilicon market leader, Tongwei, is anticipated to initiate a period of intense competition in 2024

November 29, 2023. By Abha Rustagi

After grappling with shortages in the last two years, the global polysilicon market is poised to experience an oversupply situation in 2024, according to insights from Bernreuter Research and the recently released "Polysilicon Market Outlook 2027" report.

Chinese polysilicon market leader, Tongwei, is anticipated to initiate a period of intense competition in 2024.

The polysilicon shortage in 2021 and 2022, which escalated spot prices to nearly USD 40/kg, attracted numerous Chinese entrants into the industry. The report evaluates 36 companies, revealing that 14 have initiated the construction or ramp-up of new polysilicon plants. Besides Tongwei, other major manufacturers have also expanded their production capacities.

The research anticipates a significant shakeout, eliminating up to 2,400,000 metric tons (MT) of capacity, compared to 275,000 MT during the second wave shakeout (2018-2020) and 135,000 MT during the first (late 2010 to early 2013). For 2024, Bernreuter expects the polysilicon price to drop below the all-time low of USD 6.75/kg reached in June 2020.

While China's share in global polysilicon output is projected to rise to 90 percent in 2023 (92.5 percent in solar-grade material), non-Chinese manufacturers like Wacker, OCI, Hemlock Semiconductor, and REC Silicon are expected to remain largely exempt from the shakeout.

Despite the rapid growth of the solar sector, the largest customer of the polysilicon industry, a shakeout is impending in China. Bernreuter's aggressive growth projection suggests annual PV installations to surge from 425 GW in 2023 to 1,100 GW in 2027, with an average annual growth rate of 26.8 percent.

"The consequence is inevitable: Quartz for silicon metal will run short in the second half of this decade," predicts Bernreuter, highlighting the demand strain on silicon metal made of quartz (SiO2).

The report emphasizes the urgency of addressing impending challenges in the polysilicon market amid the evolving landscape of global energy demands and sustainability goals.

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Solar manufacturing

Polysilicon

Global polysilicon market

Chinese polysilicon market