Sharp Divergence in Opening Market Of 2026: Black Commodities Strengthen, PV Chain Under Pressure

On January 8, 2026, China's commodity market experienced significant volatility, characterized by notable capital outflows and sharp divergence across sectors. The Tonghuashun Commodity Index fell by 1.34%, with a net capital outflow of USD 2.05 billion (originally 14.757 billion RMB) for the day. Among the major contracts, the black commodities sector, represented by coking coal and coke, bucked the trend and moved higher, while polysilicon at the upstream end of the photovoltaic (PV) chain suffered a heavy blow, plunging 9.00% in a single session. Such intense divergence highlights the vastly different fates facing industries due to disparities in fundamentals and policy environments within the current macroeconomic landscape. Henan Fengyang Metallurgical Materials Co., Ltd., as a close participant in the metallurgical materials industry chain, continuously monitors such structural shifts and is dedicated to providing clients with professional market analysis and supply chain response strategies.

Trading data for the day indicated a cautious market sentiment, with capital retreating from several sectors.

• Capital Flows: Net capital inflows were concentrated in a few varieties like lithium carbonate (+USD 187.2 million, originally +1.348 billion RMB) and coking coal (+USD 143.3 million, originally +1.032 billion RMB). The top of the net outflow list was occupied by Shanghai silver (-USD 424.0 million, originally -3.053 billion RMB), Shanghai aluminum (-USD 213.9 million, originally -1.540 billion RMB), and polysilicon (-USD 148.9 million, originally -1.072 billion RMB).

• Sector Performance: The gainers were led by coking coal (+4.75%), glass (+2.65%), and coke (+2.56%), reflecting a relatively positive short-term market expectation for related industrial chains. In contrast, on the decliners' side, polysilicon (-9.00%) and European container freight (-8.98%) fell sharply. The crash in polysilicon, in particular, dealt a direct blow to sentiment across the PV industry chain.

The rare 9% plunge in the main polysilicon contract resulted from a confluence of short-term policy intervention, medium-to-long-term supply-demand contradictions, and the release of high inventory pressure.

• Regulatory Intervention: It has been reported that previous industry self-discipline measures involving production cuts and price support drew regulatory attention, leading to talks with major companies and requests for rectification. This shook market confidence in the sustainability of "joint price support," becoming the trigger for the price correction.

• The Fragile "Price Without Market" Balance Broke: Although leading companies attempted to support prices by cutting production since last November, pushing the average price for N-type polysilicon materials from approximately USD 7,183 per metric ton to USD 8,310 per metric ton (converted from 51,000-59,000 RMB/ton at an exchange rate of 1:7.1), actual high-price transactions were limited due to ample downstream inventories and reduced operating rates. The market was effectively in a state of "price without market."

• Excess Fundamentals and High Inventory are the Root Pressure: According to institutional forecasts, polysilicon production in January is estimated at about 109,600 metric tons, with demand around 107,700 metric tons, indicating a continued supply surplus. More critically, industry inventories are high. By the end of December, combined factory and downstream industry inventories already exceeded 520,000 metric tons, representing a massive overhang of latent supply pressure on the market.

This market volatility, especially the divergence between the black commodities and silicon industry chains, provides clear insights for our services to upstream and downstream clients:

• Monitor Cost Transmission in the Black Sector: The strength of coking coal and coke will underpin production costs for steel and ferroalloys. We will closely track this trend, providing cost alerts and procurement timing advice to downstream alloy and steel clients, assisting them in managing raw material cost fluctuation risks.

• Scrutinize Volatility Risks in the Silicon Chain: The polysilicon crash signals that severe price volatility for upstream PV raw materials persists. While this may temporarily alleviate some demand pressure on downstream industrial silicon in the short term, it more importantly indicates a reshaping of the profit distribution pattern across the entire silicon-based materials industry chain. We will alert clients connected to the PV chain to the potential for rapid upstream price risk transmission to midstream and downstream segments.

• Strengthen the Value of Supply Chain Resilience: During periods of heightened market price and policy risks, the value of a stable and reliable supply chain partner becomes paramount. Henan Fengyang is committed to helping clients cushion the impact of such sudden market fluctuations through professional market analysis and flexible supply coordination.

Institutions generally believe that the polysilicon market's oversupply situation will be difficult to fundamentally reverse in the short term, and prices will remain under pressure. The trajectory of the black commodities sector requires further observation of winter environmental policies, pre- and post-Chinese New Year production activity, and the tangible effects of terminal real estate policies.

For market participants, broad-based rallies are unlikely. Identifying structural opportunities will be key. This requires companies to look beyond prices alone and delve deeper into the differentiated industrial logic, policy environment, and inventory cycles behind different commodities.

In the face of an increasingly complex market environment, Henan Fengyang Metallurgical Materials Co., Ltd. is ready to be your trusted partner with professional industry insights and robust supply chain services. Please feel free to contact us for market consultation or specific business needs.

Company: Henan Fengyang Metallurgical Materials Co., Ltd.

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