Polysilicon: Demand pulls Long bull galloping

Following the long bull market in the polysilicon market in 2021, the gratifying rally continued into 2022, and it was in a unilateral upward and high state of stability for 11 months throughout the year
.
Near the end of 2022, the polysilicon market showed an inflection point correction, and finally ended with a 37.
31% increase
.

Sustained unilateral gains for 11 months

The polysilicon market in 2022 rose by 67.
61%
in the first 11 months.
Looking back at the market trend throughout the year, it can be roughly divided into three stages
.
The first 8 months were in a unilateral upward trend, maintaining a high level of consolidation in September ~ November, and a sharp correction
in December.

The first phase is the first 8 months of 2022, and the polysilicon market has risen sharply unilaterally, with an increase of 67.
8%
during the period.
At the beginning of 2022, the polysilicon market started with an average price of 176,000 yuan (ton price, the same below), and after its start, the average price had reached 295,300 yuan by the end of August, and the quotation of individual manufacturers exceeded 300,000 yuan
.
During this period, the overall performance of the photovoltaic industry chain was strong, the operating rate of the main downstream silicon wafer industry of polysilicon continued to increase, and the end market profits were considerable
.
At the same time, driven by the high price of imported polysilicon, the release of new production capacity on the superimposed supply side was not as expected, and individual manufacturers were overhauled, and the price of polysilicon continued to rise
due to short supply.

The second stage is in September ~ November 2022, during which the polysilicon market showed a high level of stability, with the average price remaining at about 295,000 yuan, and the cycle fell slightly by 0.
11%.

In September, polysilicon manufacturers actively produced, the operating rate increased significantly, maintenance enterprises resumed operation one after another, and the supply increased significantly, suppressing
the market.
However, polysilicon supply and demand fundamentals remain in a tight balance, and prices remain firm and remain
high.

The third stage is December 2022, when the polysilicon market quickly corrected from the high of 295,000 yuan at the beginning of the month, with a monthly decline of 18.
08%.

The downward revision is mainly due to the high operating rate of the polysilicon industry, the start of operation of major major factories, the supply is still higher than in November 2022, and the shipment speed of enterprises has slowed down
.
On the demand side, the downstream performance into the winter was weak, the price of silicon wafers fell, and the end market also declined
.
As of December 30, 2022, the average price of the polysilicon market corrected to 241,700 yuan, down 18.
7%
from the annual high of 297,300 yuan at the end of September.

Demand has skyrocketed

Looking at the polysilicon market throughout 2022, GF Futures analyst Ji Yuanfei and others believe that due to the strong demand for photovoltaic installations in 2022, the polysilicon market has been in short supply, resulting in its price soaring
.

Wang Yanqing, an analyst at CSC Futures Industrial Products, also holds the same view
.
He said that the photovoltaic market is the most important terminal consumption area of polysilicon, and as the photovoltaic industry fully enters the era of parity in 2021, the boom cycle has opened
again.

According to data from the National Energy Administration, the country's new installed capacity of photovoltaics in 2021 was 54.
88GW, becoming the largest year in history; In 2022, the high prosperity of the domestic photovoltaic industry will continue, with a cumulative new installed capacity of 52.
60GW in the first three quarters, almost catching up with the installed capacity of the whole year of 2021, with a year-on-year increase of 105.
83%, showing an explosive trend of terminal demand
.

During this period, due to the unexpected fire of a polysilicon enterprise in Xinjiang and the power rationing experienced by Sichuan, the "important town of polysilicon production", the polysilicon market became more nervous, further driving up prices
.

The inflection point of production capacity landing suddenly appeared

However, in December 2022, the polysilicon market has "changed its style", turning from a high to a fall, and even the voice of the industry judging the "avalanche" of the polysilicon market is endless
.

"In the early part of 2022, new polysilicon production capacity will be released one after another, and driven by high profits, many new players will enter the game, old players will expand production, and domestic production capacity will continue to increase
.
" Wang Yanqing said that because the new production capacity was mainly concentrated in the fourth quarter, there was a significant increase in production, resulting in a sudden inflection point in the polysilicon market
.

Since 2021, driven by the demand for terminal photovoltaic installations, the construction
of new domestic polysilicon production capacity has begun to accelerate.
In 2022, factors such as the improvement of industry prosperity, strong downstream demand, and lucrative production have attracted a large amount of capital to the polysilicon industry, and new projects have started construction one after another, and production capacity has been increasing
.

According to Baichuan Yingfu statistics, as of November 2022, the domestic polysilicon production capacity reached 1.
1165 million tons, an increase of 60.
53% from the beginning of the year, and the main production capacity is Xinte Inner Mongolia 100,000 tons/year, GCL Inner Mongolia Phase I 100,000 tons/year, GCL Leshan 100,000 tons/year granular silicon and Tongwei Inner Mongolia Phase II 50,000 tons/year
.

In December 2022, a large number of new polysilicon production capacity gradually reached production, and at the same time, the supply of hoarded goods in Xinjiang began to circulate, and the supply of polysilicon market increased significantly, and the tight supply and demand situation quickly eased
.

The supply side of polysilicon has grown significantly, but downstream demand has declined
.
Since the terminal enterprises completed some stocking in mid-November 2022, the purchase volume began to decrease
significantly.
In addition, the weak demand at the end of the year has also made all links of the photovoltaic industry chain accumulate to varying degrees, and the excess of silicon wafers is particularly obvious, and many leading companies have accumulated a large amount of silicon wafer inventory
.
With the accumulation of inventory, silicon wafer companies' quotations for raw material procurement also continued to fall, resulting in a decline in polysilicon prices, with the average price falling by 53,300 yuan in just one month, and the 11-month rally was interrupted
.

On the whole, the polysilicon market in 2022 maintained an 11-month bull market, although in December due to the concentrated cashing of new production capacity, the increase in market supply, coupled with the weak demand side, the market showed a correction trend, but the whole year still ranked seventh in the list of chemical product gainers with an increase of 37.
31
%.