Polysilicon Prices Stall as Middle East Conflict Persists and China Cuts Output

*TL;DR: Global polysilicon prices are up 1% since February, China’s mono‑grade premium has slumped 33%, and Chinese output is expected to fall 8% in April.*

Context The war in the Middle East has rattled oil markets but left the solar supply chain largely untouched. Polysilicon, the raw material for solar cells, is still dominated by Chinese manufacturers, whose production decisions now drive global pricing.

Key Facts - The OPIS benchmark for non‑Chinese polysilicon stood at $19.138 per kilogram ($0.040 per watt) on April 14, a 1% rise from February 24. - China’s mono‑grade polysilicon premium dropped 33% to CNY 34.071 per kilogram ($4.99/kg) or CNY 0.072 per watt over the same period. - The Silicon Branch of the China Nonferrous Metals Industry Association projects an 8% decline in Chinese polysilicon output for April compared with March. - Inventory levels in China remain high; manufacturers are running lines at 50‑70% capacity and have begun maintenance cuts. - Production costs in China sit at CNY 31‑32 per kilogram, just covering raw material and electricity expenses. - Module prices have risen modestly after China removed a 9% export‑tax rebate on April 1, while U.S. TOPCon modules reached $0.292 per watt, a 1% gain since February.

What It Means The modest 1% price increase for non‑Chinese polysilicon suggests that the broader market is insulated from geopolitical shocks that have driven oil prices higher. Meanwhile, the steep 33% drop in China’s premium reflects oversupply and weak downstream demand, prompting producers to cut output. An 8% production reduction in April signals the first significant supply‑side adjustment in months, but utilization rates already hover near the lower end of feasible operation, limiting further cuts.

For downstream solar manufacturers, stable raw‑material costs may ease budgeting, yet the lingering inventory glut could suppress new orders. The modest uplift in module prices, driven by the loss of export rebates, may be offset by weak overseas demand, especially in the United States where trade and policy uncertainties linger.

Looking Ahead Watch for the impact of China’s output cuts on global polysilicon inventories and whether continued Middle East tensions trigger any secondary effects on renewable‑energy supply chains.