Non-ferrous metals | Polycrystalline silicon: Interpretation of the modification of polycrystalline silicon futures delivery products

(Source: Hisense Futures Research Institute)

Main Text

On April 1, 2026, Guangzhou Futures Exchange (GFEX) issued the 《Amendments to the Implementation Rules for Polycrystalline Silicon Futures and Options Business at the Guangzhou Futures Exchange》, which has been deliberated and approved by the board of directors of the Guangzhou Futures Exchange, reported to the China Securities Regulatory Commission, and is hereby released. Among them, the modification to Article 13 applies to the polycrystalline silicon futures PS2606 contract and all later contracts; the other modifications apply to the polycrystalline silicon futures PS2704 contract and all later contracts.

1. The modification to Article 13 concerns position limits, and applies to the PS2606 contract and all later contracts (the opening quantity for hedging transactions and market-making transactions for the Guangzhou Futures Exchange are not subject to this restriction).

Compared with the previous position limit for standard positions, the adjusted position limits are further tightened.

Source: GFEX, Hisense Futures Research Institute

2. The delivery commodity modification applies to the PS2704 contract and all later contracts.

Changes to delivery commodities: the previously designated alternative delivery commodities are adjusted to standard delivery commodities, and granular silicon is added as a standard delivery commodity; the previously designated standard delivery commodities are adjusted to alternative delivery commodities, and the quality grade premiums/discounts (quality-related price adjustments) for the delivery commodities are simultaneously adjusted. The premium for the alternative delivery commodities is 2000 yuan/ton. Judging from the price spreads of polycrystalline silicon of different grades, the 2000 yuan/ton premium matches the spot market.

Source: Mysteel, Hisense Futures Research Institute

According to GCL Technology’s official WeChat account: as the only company in the world that is producing granular silicon at scale, GCL currently has effective annual production capacity of 480,000 tons of polycrystalline silicon. GCL Technology’s electricity consumption for granular silicon is the lowest, at only 13.8 kWh/kg, far lower than traditional processes. Moreover, the company’s granular silicon products perfectly match the production demand of N-type high-efficiency modules and the trend of the EU carbon border adjustment mechanism (CBAM), and its customers already cover global leading wafer and module manufacturers.

Source: GFEX, Hisense Futures Research Institute

According to GFEX, based on different technical routes, polycrystalline silicon can be divided into chunk silicon and granular silicon. The current delivery commodities for polycrystalline silicon futures are all chunk silicon. To further supplement delivery resources, this amendment incorporates granular silicon into the delivery commodity system. On the one hand, after polycrystalline silicon futures are listed, granular silicon’s product quality stability and market recognition have increased significantly; the quality traceability system is complete and controllable, meeting the conditions to be included in the delivery commodity system. On the other hand, granular silicon has production advantages of low energy consumption and low carbon emissions. It can better serve the industry’s green and low-carbon transition development while enriching delivery resources and satisfying downstream demand. In addition, according to a relevant person in charge of GFEX, the adjustment to delivery quality standards in this round is intended to further supplement available delivery resources, ensure the delivery business runs smoothly and safely, and better align with the industry’s development trend—so that the futures delivery commodity system keeps pace with the industry’s actual supply structure and quality level, thereby better promoting contract continuity and the role of delivery, and further strengthening polycrystalline silicon futures’ ability to serve the real economy and manage industry risks.

Next, we mainly analyze what impact the delivery commodity amendments may have on the futures prices.

First, in terms of absolute prices: after regulators issued rectification opinions on polycrystalline silicon against “internal competition leading to price wars” in the name of “anti-monopoly,” polycrystalline silicon may reduce capacity or re-enter the market-oriented mode of operation. Also, there were rumors earlier that granular silicon would be included as a delivery commodity to increase the available physical delivery quantity, which would lead to polycrystalline silicon prices continuing to fall and digest the strong upward surge caused by the “anti-price-war” measures. As of now, the price of polycrystalline silicon has fallen below the industry average cost and entered the range at the upper end of cash costs of 30,000–35,000 yuan/ton. However, at this time SMM learned that a certain polycrystalline silicon manufacturer’s Xinjiang base has scheduled maintenance, and the company has tentatively planned to fully shut down at the end of April, with the tentative duration of 2–3 months. Polycrystalline silicon companies’ maintenance and production cuts can, to a certain extent, ease the pressure of accumulated supply overhang. In the short term, the downward price trend is expected to slow. But it is necessary to note that the southwest region enters the flood season around June (electricity prices in May have already started to be slightly lowered). The actual changes in production need to be continuously tracked. Therefore, the impact of delivery commodity quality changes on prices is limited; the price trend of polycrystalline silicon is mainly driven by fundamentals.

Source: SMM, Hisense Futures Research Institute

Second, in terms of relative prices: after the new rules are implemented, the quality of standard delivery commodities is < that of alternative delivery commodities. That is, for PS2703 and earlier contracts, the benchmark is high-quality standard delivery commodities; for PS2704 and later contracts, the quality of standard delivery commodities has been lowered. It is expected that the listing prices of PS2704 and later contracts will be lower than those of PS2703. Then, the quality of already-registered warrants meets the quality of the alternative delivery commodities under the new standard, and they enjoy a premium of 2000 yuan/ton. If the registered warrants are eligible for extension and correspond to PS2704 pricing, the PS2704 price should satisfy: PS2703 + transfer cost ≤ PS2704 + 2000, where the transfer cost is estimated at about 300 yuan calculated based on 35,000 yuan/ton for polycrystalline silicon. Finally, when estimating that PS2704 ≧ PS2703 − 1700, the willingness to transfer and deliver would exist (buy PS2703 – sell PS2704). However, if PS2704 is far below PS2703 − 1700, you can look for opportunities to buy PS2704 – sell PS2703, capturing the opportunity of a narrowing price spread (perhaps with a small probability of being able to receive high-quality deliverable commodities that can be converted and rolled to a distant month).

Source: SMM, Hisense Futures Research Institute

Finally, GFEX requires that polycrystalline silicon with a production date within 90 days (including the current day) can apply for registering standard warrants, and it requires that at the end of May/November each year, the warrants must be forcibly canceled. Because the new standard starts to be implemented from the PS2704 contract, a two-month transition period is provided. At present, the risk of insufficient warrants is expected to be low (since the new rules will be in effect for another 1 year, ultimately it will still be necessary to monitor whether the energy consumption quota limit for 2026 year-end is implemented and whether the demand side improves, among other factors).

Analyst Brief ABOUT US

Fan Binting (Trading Consultation No.: Z0019571): A researcher at Hisense Futures Research Institute focusing on non-ferrous metals and new energy metals. She holds a master’s degree in statistics and is mainly responsible for research on lithium carbonate, industrial silicon, new energy products, and non-ferrous metals such as copper and aluminum. She is skilled at judging market trends by combining a product research framework with qualitative analysis of fundamentals and quantitative data analysis. She has extensive experience in providing industry price risk management services and provides customized hedging solutions to multiple non-ferrous metal enterprises.

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