Main silicon metal futures contract falls to 7,200 yuan/mt, with moderate spot and futures market transactions [SMM Silicon Industry Weekly Review]

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SMM reported on May 29:Silicon Metal:

The market price of silicon metal continued to decline, with prices extending their downward trend this week. In the futures market, the lowest point of the main silicon metal continuous contract during the week fell to 7,200 yuan/mt. On May 29, the Si2507 contract closed at 7,215 yuan/mt, down 665 yuan/mt WoW, representing an 8.4% decline. In the spot market, SMM's east China oxygen-blown #553 silicon was priced at 8,400-8,500 yuan/mt, down 200 yuan/mt WoW. #441 silicon was priced at 8,700-8,900 yuan/mt, down 250 yuan/mt WoW. #421 silicon was priced at 8,900-9,300 yuan/mt, down 400 yuan/mt WoW. Silicon metal futures prices fell sharply, and the spot-futures price spread quoted by futures traders rose, but the absolute price remained significantly lower than the price quoted by silicon enterprises. Most downstream and traders purchased goods through fixed-price transactions during the week.

On the demand side, the operating rate of polycrystalline silicon remained largely stable during the week. The monthly production of polycrystalline silicon for the entire month of May also showed limited changes MoM. In June, there will be both increases and decreases in the production schedule of polycrystalline silicon. Attention should be paid to the subsequent changes in the actual operating rates of polysilicon enterprises. As silicon metal prices continued to fall, the raw material inventory levels of polysilicon enterprises remained low, and the prices of new orders for silicon powder weakened WoW. The operating rate of silicone changed slightly in the short term, with a slight increase in the operating rate this week. However, it will decline again next week as some monomer production capacities undergo maintenance. Overall, in the long term, the operating rate of the silicone industry in June is expected to increase slightly compared to May. The operating rate of primary aluminum-silicon alloy remained basically stable during the week, while the operating rate of secondary aluminum-silicon alloy was slightly weak, mainly due to weak demand during the seasonal consumption off-season. Purchases of silicon metal were maintained on an as-needed basis.

On the supply side, due to the production release from the previously resumed silicon metal production capacity, supply increased MoM. The futures market suffered a setback and declined during the week, making it difficult for silicon enterprises to follow the decline in quotes, resulting in fewer shipments. The prices for fixed-price purchases were relatively low, and market transactions were active during the week, with moderate turnover in social warehouses. The spot price of silicon metal consolidated at lows.

Polysilicon:This week, the price index of N-type polysilicon was 35.01 yuan/kg. N-type recharging polysilicon was priced at 35-38 yuan/kg, and N-type mixed polysilicon was priced at 31-36 yuan/kg. The overall price of polysilicon remained largely stable. Polysilicon transactions this week were relatively limited compared to last week. Downstream inventories were sufficient, and purchasing enthusiasm was weak. In June, the production schedule of polysilicon is expected to increase slightly, involving production increases/resumptions at 2 bases and production cuts/shutdowns at 3 bases. The operating rate of polysilicon is weaker than previously expected, and overall resumption of production during the rainy season is being approached with caution.

Wafer: This week, the price of N-type 183 wafers was 0.93-0.95 yuan/piece, the price of 210R wafers was 1.05-1.1 yuan/piece, and the price of 210 wafers was 1.25-1.3 yuan/piece. Overall, wafer prices have remained stable, with quotes from major manufacturers gradually stabilizing at 0.93 yuan/piece. Currently, cost losses are widespread among wafer enterprises, and the market is gradually approaching a low point—with limited price declines. In June, a significant number of wafer enterprises implemented production cuts, a situation that was also widespread, but the extent of the cuts was limited for each enterprise. It is expected that wafer production will decline in June, but the decline will be narrow.

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