In February, due to fewer production days and the traditional demand off-season in the first quarter, operating rates across various segments of the photovoltaic industry chain declined to varying degrees in China. Enterprises generally produced based on immediate demand, resulting in significant production reductions overall. Notably, the polysilicon segment saw a particularly pronounced production contraction, falling by 12.3% month-on-month. The cell segment experienced a nearly 10% month-on-month decline as producers reduced output under cost pressure from rising silver paste prices.
China's polysilicon production reached 82,000 tonnes in February, a decrease of 12.3% month-on-month and 8.48% year-on-year. The domestic polysilicon industry's capacity utilization rate stood at 28.8% in February, down 4% month-on-month. The main reduction came from a leading enterprise suspending production and shifting to consuming existing inventory, while other enterprises largely maintained their original production pace. Downstream wafer manufacturers showed low purchasing willingness, with most postponing restocking until mid-to-late March, making polysilicon sales difficult. Facing continuously accumulating inventory pressure, enterprises generally reduced production.
Source: Mysteel
China's silicon wafer production reached 44.16 GW in February, a decrease of 4.4% month-on-month and 4.86% year-on-year. The domestic silicon wafer industry's capacity utilization rate stood at 44.6% in February, down 2.5% month-on-month. Prices and production in of silicon wafer were suppressed by high inventories and weak demand. Most manufacturers maintained low operating rates, with some small and medium-sized producers even temporarily halting production to alleviate inventory backlogs. Leading enterprises maintained operating rates of 40-45%, specialized producers maintained rates of 20-30%, while integrated producers maintained rates around 60%.
Source: Mysteel
China's battery cell production reached 35.22 GW in February, a decrease of 9.82% month-on-month and 22.26% year-on-year. The battery cell industry's capacity utilization rate stood at 39.6% in February, down 4.3% month-on-month. Primarily affected by demand and cost pressures, enterprises maintained low production schedules. High silver prices with volatility led to rigid increases in cell production costs, further compressing profit margins. Some enterprises chose to reduce output in response to cost pressures. Integrated cell manufacturers maintained operating rates of 50-60%, while specialized cell manufacturers maintained rates of 20-35%.
China's photovoltaic module production reached 28.92 GW in February, a decrease of 7.14% month-on-month and 31.15% year-on-year. The domestic photovoltaic module industry's capacity utilization rate stood at 31.7% in February, down 2.4% month-on-month. The domestic end-market entered its traditional installation off-season in February, with the pace of tenders for both centralized ground-mounted power stations and distributed projects slowing down, leading to low production schedules among module manufacturers. Leading enterprises mainly maintained operating rates of 30-48%, while some enterprises suspended production for holidays due to insufficient order demand.
Looking ahead, March marks the last chance for export tax rebates. According to Mysteel, the overall production increase of silicon wafers, cells and modules in China will increase in March. Among them, integrated enterprises will mainly increase production, while specialized enterprises will have a slight increase in production schedules due to order and inventory pressure.
Written by Cora Ji, jiruyan@mysteel.com
