Silicon Market Sentiment Intensified Amid Ongoing Competition, Focus on Changes in Supply-Side Operating Rates [SMM Silicon Industry Weekly Review]

SMM News, March 26:Silicon Metal:This week, the silicon metal market remained in a stalemate, with the price center of some specifications edging up slightly. As of March 26, SMM east China oxygen-blown #553 silicon stood at 9,100-9,300 yuan/mt, up 100 yuan/mt WoW. #441 silicon stood at 9,300-9,500 yuan/mt, flat WoW, and #3303 silicon stood at 10,200-10,400 yuan/mt, also flat WoW. In the futures market, affected by sentiment and expectations around the supply side, such as “self-discipline among silicon enterprises and anti-involution,” the most-traded silicon metal contract had continued to hold up well over the past week, closing at 8,735 yuan/mt late on Thursday with a notable gain. In terms of quotations, silicon enterprises mostly kept shipment offers stable, with some offers testing slightly higher; the price center of quotations from trading firms engaging in both spot and futures market rose markedly, and low-priced cargoes disappeared. As downstream acceptance of high prices was limited, high-priced transactions in the market were difficult to conclude.

Demand side, weekly operating rates at polysilicon enterprises were basically stable. Polysilicon production may increase slightly in April, but the increment was relatively limited, providing insufficient support for growth in silicon metal demand. Recently, some silicon powder orders were gradually released and concluded. Weekly operating rates at silicone enterprises declined slightly, mainly due to maintenance at a few monomer plants in recent days. Silicone monomer plants recently placed some silicon metal procurement orders, and transaction prices were basically stable compared with the previous period. Operating rates at aluminum alloy enterprises were basically stable, and end-use consumption provided relatively limited support to operating rates. Recently, changes in operating rates of primary and secondary aluminum alloy were mainly stable or showed slight increases amid stability.

Supply side, operating rates at silicon enterprises were largely stable, and fluctuations in silicon metal production were not obvious. Detailed plans by silicon enterprises regarding self-discipline remain unclear for now. Under the current situation, downstream demand for silicon metal has recently remained stable within a range. Against the backdrop of no obvious increase in downstream demand, if no substantive production cuts occur on the supply side, the fundamentals of silicon metal may not improve significantly. In addition, the rainy season in southwest China in June will pose resistance to prices, meaning silicon metal needs stronger price drivers. Going forward, focus should remain on changes in supply-side operating rates and the direction of market sentiment.

Polysilicon:This week, the polysilicon price index was 39.93 yuan/kg, with N-type recharging polysilicon quoted at 36-43.5 yuan/kg and granular polysilicon quoted at 40-43 yuan/kg. Polysilicon prices continued to decline this week, and some producers were seen shipping at low prices. Wafer plants currently showed a clear tendency to rush to buy amid continuous price rise and hold back amid price downturn, and overall transactions remained limited. Polysilicon production may increase to some extent in April, but the overall increment was relatively limited.

Wafer: Wafer prices edged down slightly this week. Among them, N-type 183 wafers were priced at 0.98-1.00 yuan/piece, 210R wafers were quoted at 1.05-1.13 yuan/piece, and 210mm wafers were quoted at 1.25-1.33 yuan/piece. The low-end wafer price range declined this week, while the overall decrease narrowed WoW. At present, raw material prices remained in a downward cycle and had not shown any clear signs of bottoming out, so cost support for wafers was limited. In April, wafer enterprises successively announced production cut plans, but the overall scale fell short of expectations. Therefore, wafer supply is expected to shift back into oversupply in April. In the short term, wafers are still on a downward price trend, but the overall magnitude of the decline is limited.

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