The photovoltaic (PV) industry chain has shown clear price support recently, driven by inventory digestion and government stockpiling efforts. Polysilicon producers have aggressively raised quotes to RMB 65/kg, while wafer prices are rebounding amid inventory clearance. Battery cell prices surged sharply this week, and module prices are poised for recovery as ultra-low-priced orders fade with year-end project completions.

**Polysilicon** Buoyed by stockpiling policies, polysilicon producers have adopted a firm stance, lifting quotes to RMB 65/kg. Although transactions remain at RMB 51-53/kg due to weak downstream demand, the move signals a clear bottoming-out. While prices may not spike to RMB 65/kg immediately, policy support has stabilized the market, reversing earlier bearish expectations. With excess capacity gradually absorbed, polysilicon prices are entering an upward trajectory.

**Wafers** Driven by production cuts and battery makers’ restocking, wafer inventories have dropped below 15GW—a historic low. This supply-demand shift prompted wafer producers to halt sales and raise prices yesterday, intensifying market competition. Although producers target a RMB 0.3/W hike, achieving this is challenging due to downstream resistance. Still, wafer prices are set to rise by at least RMB 0.05/W in the short term, marking a rebound phase.

**Battery Cells** A strong price rally emerged this week, with tier-1 manufacturers halting shipments below RMB 0.3/W and smaller firms following suit. Rising wafer and silver paste costs, coupled with output cuts, have fueled the hike. Leading players like Tongwei now quote above RMB 0.32/W, with RMB 0.3/W gaining market acceptance. However, module makers’ pushback due to weak demand has created pricing disputes. Post-industry meetings on December 18, battery prices are expected to consolidate above RMB 0.3/W.

**Modules** Despite sluggish demand keeping prices flat, the market sentiment is turning bullish. Top players like LONGi announced a RMB 0.04/W increase to lift price benchmarks. As year-end projects wind down, ultra-low-priced orders are vanishing, paving the way for higher average prices. While immediate hikes lack strong demand support, upstream cost pressures and seasonal recovery in Q2 are expected to drive modules into profitable territory.