Silicon · Monthly — April 2026

Bottom line: polysilicon at $5.13/kg (April 22, 2026), in a bear market after a 35% three-month decline. China NFMIA data shows April production 92,000 tonnes vs demand 73,000 tonnes — structural oversupply. This is the only covered material not rallying; lithium, neodymium, copper, cobalt all rallying on supply concentration, silicon struggling on Chinese oversupply.

Price state (verified 2026-04-24)

Silicon metal (met-grade) also generally weak, tracks polysilicon dynamics + soft aluminum demand.

Semi-grade polysilicon pricing is opaque (long-term contracts between wafer houses and polysilicon producers), but generally follows a stable-premium relationship over solar- grade.

What changed / what matters

• Rally paused, market stabilising at the floor. After

the 35% crash, trading is subdued. Slight CNY depreciation gave Chinese producers a soft tailwind (exports more competitive in USD terms) which paused the decline.

• Chinese supply discipline has NOT emerged despite

painful pricing. Tongwei, Daqo, Xinte, GCL continue to operate near-full capacity. Smaller producers are where shutdowns are happening.

• Solar module pricing collapse (~70% since 2023) means

the downstream demand isn't picking up fast enough to absorb supply. Installation volumes still growing in GW terms, but revenue per MW has dropped so much that capex discipline is spreading.

• US import patterns shifting away from Chinese-Xinjiang

polysilicon due to UFLPA enforcement. Southeast Asia transshipment (Vietnam, Malaysia) is partially circumventing; direct Chinese imports down materially.

Concentration map (pre-wake + verified)

Silicon metal (metallurgical, verified)

• China: dominant (~14× Russia's #2 share per Statista)
• Russia: #2
• Rest: Norway, US (proprietary), Brazil, France

Polysilicon (solar-grade, structural)

• China ~85-90% of global capacity
• Top 5: Tongwei, Daqo, Xinte, GCL-Poly, East Hope
• Non-Chinese: Wacker (Germany), OCI (Korea/Malaysia),

Hemlock (US — semi focus), REC Silicon (US)

Polysilicon (semi-grade)

• Shin-Etsu, SUMCO, GlobalWafers, Siltronic, SK Siltron

dominate globally (wafer makers)

• Only ~6 companies globally at electronic-grade
• Hemlock US dominant for highest-purity polysilicon feedstock

Why silicon breaks from the other 4 covered materials

The asymmetry: rally in 4 materials reflects concentrated supply meeting rising demand. Silicon bear market reflects concentrated supply meeting TOO MUCH supply (each producer rushing into overcapacity). Same concentration, opposite outcome. The lesson: "Chinese dominance" isn't automatically bullish — it depends on whether capacity is rationed (rare earths, lithium refining) or competitively over-built (polysilicon).

Scenarios

• Further decline to $4.00-4.50/kg: if solar demand

slows (grid connection delays, interest rates biting residential solar), producer losses force curtailment, eventual supply discipline

• Hold $5.00-5.50/kg range: base case — oversupply

continues but pricing at cost-floor for tier-2 producers; tier-1s (Tongwei, Daqo) are cash-cost survivors

• Rally to $7-9/kg: if Beijing forces supply discipline

(capacity rationalization, M&A), OR US/EU imposes further import restrictions, OR Xinjiang supply chain gets more restricted

Base case is extended bear. Semi-grade is insulated from the oversupply (different market, long-term contracts).

Policy / geopolitical watchlist

• UFLPA enforcement intensity (Xinjiang poly import ban)
• US IRA domestic-content bonus payments — are solar

developers actually sourcing US-refined poly?

• EU CBAM — silicon metal is carbon-intensive; CBAM

expansion could re-shape imports 2026-2030

• China Ministry of Industry any capacity-discipline

announcement (rare, but would move prices)

• Indian and Middle East solar manufacturing — both

building domestic capacity; shifts long-term geography

Questions this report helps answer

• "Why is silicon cheap when everything else is rallying?"

— Because concentrated supply + competitive overinvestment is different from concentrated supply + rationed output. Chinese polysilicon producers are racing each other into oversupply; Chinese rare earth refining is not.

• "Should I re-shore polysilicon?"

— Economically hard unless heavily subsidized. Current cost structure: Chinese poly ~$4-5/kg cash cost, US poly ~$7-10/kg. Without policy support, doesn't work.

• "Is this a buying opportunity?"

— For solar developers / module buyers: yes, input costs at multi-year lows. For polysilicon equity: no (marginal producers losing money, tier-1s cash-flow-neutral).

What this report still needs

• Silicon metal spot prices (met-grade)
• Tongwei / Daqo / Xinte Q1 2026 earnings (late April)
• Wacker + OCI 2026 guidance
• Solar module price trajectory (weekly)
• Detailed UFLPA enforcement metrics

Cross-references

• docs/minerals/materials/silicon.md (dossier)
• docs/minerals/reports/2026-04-overview.md —

silicon is a counter-example to the "concentrated supply = rally" narrative the other 4 materials support. Worth updating the overview to reflect this nuance.

• docs/thinking/2026-04-22-tech-ai-value-chain.md — semi-

grade silicon connects to Taiwan/Korea/Japan wafer houses