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90% of Capacity Says No More Below-Cost Sales: Polysilicon's Cartel Moment

A modern polysilicon production facility with rows of solar-grade silicon ingots and processing equipment under bright industrial lighting.
Originally published at China Industry Intel. Read the complete report.

90% of Capacity Says No More Below-Cost Sales: Polysilicon's Cartel Moment

Eight Chinese polysilicon producers controlling 90%+ of effective capacity — including Tongwei, GCL Technology, and Daqo — signed a pledge on August 6 to stop selling below full cost, using a standardized cost-accounting framework issued by CPIA on July 27. Market regulators held a price-compliance meeting on July 31. The pledge also commits to retiring inefficient capacity. This is effectively coordinated production discipline: eight companies setting a price floor under regulatory supervision, backed by a standardized cost methodology that makes enforcement auditable.

Key Market Takeaways:

  • Price floor mechanism: The CPIA cost-accounting standard creates a transparent, auditable baseline — regulators can verify compliance, making this pledge more enforceable than past voluntary agreements that collapsed.
  • Capacity rationalization: The pledge to reduce inefficient capacity signals that sub-tier producers face forced exit, accelerating industry consolidation toward the top eight.
  • Downstream cost impact: Higher polysilicon prices will flow through to solar module costs, potentially slowing utility-scale solar deployment in price-sensitive markets like India and Brazil.

Conclusion: China's polysilicon sector is attempting a regulated price floor — if enforced, it ends the race-to-the-bottom that crushed margins, but risks inviting antitrust scrutiny in export markets.


>> Read the full in-depth report with complete metric tables and market forecasts on China Industry Intel.


More CII coverage: Energy & Renewable | EV & Battery

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