Transferred from: China Business Network

Our reporters Zhang Yingying and Wu Kezhong report from Beijing

Recently, the official website of the China Securities Regulatory Commission announced that it has agreed to the registration of polysilicon futures and options on the Guangzhou Futures Exchange. At the same time, the Guangzhou Futures Exchange forwarded the news and issued a notice on matters related to the listing and trading of polysilicon futures contracts and options contracts, as well as relevant rules.

The reporter of "China Business Daily" noted that according to the above notice arrangement, polysilicon futures contracts will be listed and traded from December 26, 2024 (Thursday). This also means that after the successful launch of industrial silicon and lithium carbonate futures varieties on the Guangzhou Futures Exchange, the third new energy futures variety - polysilicon futures will be launched.

Polysilicon is a form of elemental silicon, which is a non-metallic material that uses industrial silicon as raw material and purifies it through a series of physical and chemical reactions to reach a certain purity. At present, polysilicon in China is mainly used in the photovoltaic industry and the semiconductor industry, and is the most widely used in the photovoltaic field. 

After more than ten years of development, China has become the world's largest polysilicon supplier, accounting for more than 90% of the world's output in 2023. The reporter learned from the Silicon Branch of the China Nonferrous Metals Industry Association that from 2013 to 2023, China's polysilicon production capacity increased from 151,000 tons to 2.02 million tons, and the output increased from 83,300 tons to 1.47 million tons, achieving a substantial increase in scale. From the perspective of the global supply pattern, among the top 10 polysilicon producers, nine are Chinese enterprises, and the main production capacity is concentrated in Xinjiang, Qinghai, Inner Mongolia, Sichuan and Jiangsu.

According to the data of the Silicon Branch of the China Nonferrous Metals Industry Association, the average transaction price of N-type re-feeding material for solar-grade polysilicon was 40,300 yuan/ton, the transaction price of N-type dense material was 36,300 yuan/ton, and the transaction price of P-type polysilicon was 33,100 yuan/ton.

The reporter noted that since 2023, the supply and demand of polysilicon have changed, and the price has shown a cliff-like decline. Compared with the average price of dense material at the beginning of 2023 of 178,200 yuan/ton, the price has fallen by nearly 80%.

At this stage, the polysilicon industry is still in a state of phased supply-demand mismatch. Chen Tianlang, an analyst at TrendForce, said that the growth rate of polysilicon production capacity and output is expected to slow down significantly in 2025 and enter a stagnation cycle. The CAGR (compound annual growth rate) will fall to 4%; In the next few years, the focus of the polysilicon sector will shift from improving quantity and quality to repairing the surplus on the supply side.

Lv Jinbiao, deputy director of the expert committee of the silicon branch of the China Nonferrous Metals Industry Association, said that the global polysilicon production capacity is expected to reach 3.5 million tons in 2025, while the demand is about 1.77 million tons. Low-load operation in the polysilicon industry will become the norm, and the overall industry operating rate may drop to 50%; After 2025, mergers and acquisitions, equity transfers and other phenomena will become more frequent; The whole industry will gradually shift from losses to meager profits.

In the face of market uncertainty, Ma Haitian, executive deputy secretary general of the Silicon Branch of the China Nonferrous Metals Industry Association, suggested in a series of training activities on polysilicon varieties of the Guangzhou Futures Exchange that polysilicon companies should actively use risk management tools to hedge the risk of market fluctuations.

"The futures market is a product of the mature market economy, and the futures market can provide effective risk hedging tools for the production and operation of entities and stabilize the interference caused by violent market price fluctuations on the operation of enterprises. Enterprises should take the initiative to adapt to changes in the situation, cultivate professional talents, familiarize themselves with futures rules, and make full use of risk management tools. Ma Haitian said.

According to the analysis of Bank of China Futures, the listing of polysilicon futures is of great significance to price discovery, industrial risk management, optimal allocation of resources, and enhancing the voice and pricing power of China's global market.

For example, PV module manufacturers can rationalize their purchasing plans based on futures prices to avoid a sudden increase in polysilicon prices that could lead to significant cost increases. Polysilicon producers are worried about future price declines, so they can sell the corresponding number of contracts in the futures market, and when the price does fall, the profits in the futures market can make up for the losses in the spot market.

"As polysilicon spot continues to be under pressure near the cash cost line, the overall valuation is low, and a series of industry self-discipline policies have been introduced recently, which may lead to the futures price of polysilicon futures being included in the expectation of long-term industry pattern optimization and profit recovery to a certain extent after the listing of polysilicon futures. The optimism in the futures market may have more emotional impact on the cash market. Orient futures analysis said.

For the listing of polysilicon futures, polysilicon companies have had different reactions.

Polysilicon leader Daqo Energy (688303. SH) investor relations related people told reporters that the company has colleagues responsible for paying attention to futures, and the specific is also being studied. Another person from the leading polysilicon securities department said: "At this stage, the price of polysilicon in the photovoltaic industry fluctuates greatly, and polysilicon futures can provide the industry with a future price signal, which is conducive to the stable operation of enterprises." We actively support the work of the Futures Institute, and whether or not to participate is subject to the announcement. ”

Yuan Chao, a long-term observer of the photovoltaic industry and founder of the photovoltaic counseling ape, told reporters: "At this stage, the enthusiasm of polysilicon companies to participate in futures trading needs to be further observed. At present, the number of polysilicon and wafer companies is not large, and it belongs to the low-frequency market. Some leading companies have signed long-term agreements with downstream wafer companies, and non-leading polysilicon companies may have strong participation. It should be noted that in the early stage of trading in the polysilicon futures market, it is necessary to control quality issues so as not to affect the yield of silicon wafers. ”

(Editor: Dong Shuguang Review: Wu Kezhong Proofreader: Yan Jingning).