The China Securities Regulatory Commission (CSRC) has approved polysilicon derivatives to address rising price volatility and structural supply-demand imbalances in the solar polysilicon market.
The CSRC has approved the registration of polysilicon futures and options on the Guangzhou Futures Exchange (GFE), marking an important step in the development of risk management tools for the solar energy supply chain.
The GFE has since announced contract details and trade rules, along with an open call for designated supply warehouses and quality inspection agencies.
Polysilicon futures start trading on December 26, followed by options on December 27. The standard contract size for futures is 3 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 quotation benchmark on the first trading day. Thereafter, the margin and price limits are adjusted to 9% and 7% respectively, based on the previous day’s settlement price.
The first contracts cover delivery months from June to December 2025, labeled PS2506 through PS2512. Trading will take place Monday to Friday, excluding public holidays, with specific morning and afternoon sessions.
Futures have a transaction fee of 0.01% of the trade value, while the option fee is set at CNY 2 ($0.28) per lot. Initial option orders will be limited to limit price and stop limit instructions, with a maximum batch size of 100 lots.
GFE is looking to establish supply warehouses in key polysilicon production regions including Inner Mongolia, Sichuan, Yunnan, Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang, reflecting the geographic concentration of the industry.
The adoption of polysilicon derivatives addresses rising price volatility and structural supply-demand imbalances in the solar polysilicon market.
The China Photovoltaic Industry Association (CPIA) has said that polysilicon price fluctuations reached 227%, 63% and 280% in 2021, 2022 and 2023, respectively. These price swings have underscored the critical need for risk management tools in the sector, which is central to China’s clean energy goals.
GFE has also launched 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 CNY 13.7 billion and CNY 29.4 billion in November 2024.
Polysilicon futures and options are expected to increase the stability and efficiency of China’s solar value chain, helping companies hedge against volatility, manage risk and strengthen market confidence as the country expands its renewable energy capacity.
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