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The China Securities Regulatory Commission (CSRC) has approved polysilicon derivatives to address rising price volatility and structural imbalances between supply and demand in the solar-grade polysilicon market.
The China Securities Regulatory Commission (CSRC) has approved the listing of polysilicon futures and options on the Guangzhou Futures Exchange (GFE), marking a key step in the development of risk management tools for the solar supply chain.
The GFE has since revealed contract details and negotiation rules, along with an open call for designated delivery warehouses and quality inspection agencies.
Polysilicon futures will begin trading on December 26, followed by options on December 27. The standard futures contract size is 3 metric tons per lot.
Initial trading margins are set at 9% of the contract value, and the daily price limit is 14% above or below the quoted reference on the first trading day. Thereafter, the margin and price limits will be adjusted to 9% and 7% respectively based on the settlement price of the previous day.
The first contracts will cover the delivery months from June to December 2025, called PS2506 to PS2512. They will be negotiated from Monday to Friday, except holidays, with specific morning and afternoon sessions.
Futures will have a transaction fee of 0.01% of the trade value, while options fees have been set at 2 yuan ($0.28) per lot. Initial options orders will be limited to limit and maximum price instructions, with a maximum lot size of 100 lots.
GFE is seeking delivery warehouses in key polysilicon production regions such as Inner Mongolia, Sichuan, Yunnan, Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang, reflecting the geographic concentration of the sector.
The approval of polysilicon derivatives addresses increasing price volatility and structural imbalances between supply and demand in the solar-grade polysilicon market.
The China Photovoltaic Industry Association (CPIA) has noted that polysilicon price fluctuations reached 227%, 63% and 280% in 2021, 2022 and 2023, respectively. These price swings have underlined the critical need for risk management tools in the sector, which is central to China’s clean energy goals.
GFE has also introduced futures for industrial silicon and lithium carbonate, key materials in the renewable energy sector. These contracts, launched in December 2022 and July 2023, have shown strong market activity, with average daily trading volumes of 13.7 billion yuan and 29.4 billion yuan by November 2024.
Polysilicon futures and options are expected to improve the stability and efficiency of Chinas solar energy value chain, helping companies hedge against volatility, manage risks and boost market confidence as the country expands its renewable energy capacity. |
