China’s largest polysilicon producers are getting ready to take drastic measures to curb overcapacity and stabilize the struggling sector, based on GCL Technology Holdings. The corporations are in talks to kind a 50 billion yuan ($7 billion) acquisition fund geared toward shutting down roughly one-third of the nation’s manufacturing capability and implementing OPEC-style output quotas.
Jun Zhu, GCL’s investor relations director, likened the initiative to an “OPEC of the polysilicon {industry},” the place complete output can be regulated by a central committee and manufacturing quotas distributed amongst collaborating corporations. The purpose is to make sure worth stability and get rid of inefficient operations, aligning with Beijing’s current push to finish “disorderly worth competitors.”
At the top of 2024, China’s complete polysilicon manufacturing capability stood at 3.25 million tons, based on Bernreuter Research. The proposed closures would get rid of roughly 38% of that capability, leaving round 2 million tons in operation. Industry-wide efforts to consolidate manufacturing gained traction after President Xi Jinping in early July referred to as for a halt to cutthroat pricing and the retirement of outdated manufacturing strains. The Ministry of Industry adopted go well with days later, pledging to assist restructuring efforts.
Polysilicon costs have surged almost 70% in current weeks, reflecting market anticipation of those supply-side reforms. GCL Chairman Zhu Gongshan had beforehand hinted at restructuring plans throughout a photo voltaic {industry} convention in June, although that is the primary time the total scope, timeline, and monetary backing of the plan have been reported.
Jun Zhu confirmed that the acquisition platform is anticipated to launch within the third quarter of 2025 and start buying extra capability and market inventories within the fourth quarter. The fund’s central committee—composed of polysilicon producers, collectors, and doubtlessly authorities regulators—will purpose to keep up costs inside a steady, mutually useful vary.
China’s National Development and Reform Commission has not but responded to requests for touch upon the proposed industry-wide plan. The initiative indicators one of the crucial concrete steps but in Beijing’s effort to restructure oversupplied sectors and promote extra sustainable progress in key industries like photo voltaic vitality.
