Daqo to Cut Polysilicon Output in 2025 Amid Market Oversupply

Daqo

Production Declines as Inventory Remains High and Utilization Drops

Daqo New Energy, a leading Chinese polysilicon producer, will significantly reduce its 2025 output due to prolonged market oversupply.

The company expects to produce 110,000–140,000 tons, down from 205,068 tons in 2024 and 197,831 tons in 2023.

In Q1 2025 alone, Daqo projects production of just 25,000–28,000 tons, sharply lower than 62,278 tons in Q1 2024.

This move comes as China's polysilicon output slows, with national production dropping below 100,000 tons per month.

Domestic inventory levels remain high at approximately 250,000 tons, even as wafer demand reaches around 45GW.

Daqo sold more than it produced in Q4 2024, delivering 42,191 tons against output of 34,236 tons to reduce inventory.

Market May See Short-Term Price Uptick in Q2

Despite the supply glut, Daqo forecasts a brief price rebound in the second quarter of 2025.

Tightened production, seasonal hydroelectric power costs, and upcoming regulations may drive prices higher.

Hydroelectricity costs are expected to stay high through May, limiting output to 90,000–100,000 t/month.

New policy measures from China’s National Development and Reform Commission and National Energy Administration may prompt short-term buying before mid-year.

However, the second half of 2025 may bring renewed price pressure as front-loaded demand subsides.

Utilization May Stay Low Despite Installed Capacity

Although China has about 2 million tons/year of installed polysilicon capacity, actual demand may hit only 1.4–1.6 million tons.

Thus, industry utilization could remain at 40–50% over the medium to long term, Daqo warned.

Polysilicon prices fell from $11.48/kg in 2023 to an average of $5.66/kg in 2024.

Daqo's Q4 selling price was $4.62/kg, down from $7.97/kg a year earlier.

Looking ahead, prices may stabilize at 37–40 yuan/kg ($5.08–5.49) for p-type polysilicon and 40–45 yuan/kg for n-type polysilicon.