China’s State Administration for Market Regulation (SAMR) has halted the solar industry’s $7 billion plan to reduce polysilicon overcapacity in early January, a move intended to ease price pressure across the supply chain. Since then, the Chinese authorities have given no indication that the plan will resume, leaving market participants in continued uncertainty.
“SAMR appears to have paused efforts to consolidate the polysilicon industry, at least in the near term, and is refraining from supporting industry-led coordination that could be seen as stifling competitiveness,” Karen Tang, editorial editor Europe at Dow Jones, told pv magazine. “Without new consolidation measures, polysilicon prices will likely lose the upward momentum seen since last July and hover near cash-cost or breakeven levels, while excess inventories could weigh further on the market. Concerns over weaker earnings and margin pressure could return across the solar value chain. However, if consolidation and output cuts are implemented in a disciplined, compliant manner, they could help rebalance the market and bring greater price stability to the polysilicon sector.”
Tang noted that the removal of China’s 9% VAT rebate for exports forces manufacturers to either pass the cost onto buyers or absorb it themselves.
“In reality, it’s likely a combination of both, and we have been seeing the VAT adjustment being priced in,” she said. “Since the January announcement, market reaction has been strongest in front-end trading, with buyers and sellers rushing to secure modules ahead of the April deadline rather than risk a potential price shock afterwards. OPIS FOB China TOPCon spot module prices have risen more than 30% since the start of the year, and the forward curve shows modules offered for delivery later in 2026 are priced higher than prompt levels.”
Tang said she expects first-quarter 2026 prices to remain highly volatile, with the OPIS FOB China forward curve trading between $0.096/W and $0.125/W in recent weeks. Second-quarter delivery prices are broadly holding at $0.12/W to $0.125/W.
The forward curve indicates marginally higher prices for modules loading in the second half of 2026 compared to the first half of the year, a typical pattern during periods of oversupply when the front market trades at a discount to later deliveries.
“While the VAT rebate removal and higher production costs have pushed prices up in the short term, downside risks remain,” Tang explained. “China’s domestic installation outlook is sluggish, and a notable portion of demand has been pulled forward into Q1 2026, which may dampen buying interest later in the year.”
She added that many buyers are taking a wait-and-see approach amid recent volatility and remain reluctant to commit to second‑half 2026 deals. Manufacturers, meanwhile, maintain different price floors depending on their cost structure and business rating.
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