Silicon Metal Prices Moved Sideways, Focus on the Pace of Production Resumptions on Both Supply and Demand Sides [SMM Silicon Industry Weekly Review]

SMM News, May 28:Silicon Metal:Spot silicon metal prices were mostly stable this week, with the price center of individual grades edging up slightly WoW. As of May 28, SMM east China oxygen-blown #553 silicon was at 9,100-9,200 yuan/mt, up 50 yuan/mt WoW; #441 silicon was at 9,300-9,400 yuan/mt, flat WoW; #421 silicon (used in silicone) was at 9,400-9,800 yuan/mt, flat WoW; #3303 silicon was at 10,100-10,300 yuan/mt, flat WoW. Futures market, the most-traded SI2609 contract closed at 8,590 yuan/mt on Thursday, up 150 yuan/mt WoW. Open interest of the most-traded contract stood at 270,000 lots, down 38,000 lots WoW, with silicon metal open interest declining notably recently. Transaction side, the trading atmosphere in the Chinese market was sluggish. Some silicon suppliers held their offers stable, while some raised their offer centers slightly WoW. Downstream users mainly purchased as needed.

Demand side, weekly polysilicon production edged up slightly WoW. In June, as leading polysilicon enterprises resume production, the polysilicon operating rate is expected to gradually increase, providing a notable boost to silicon metal consumption. The weekly silicone operating rate was basically stable, with operating rates of silicone monomer enterprises rising and falling, showing no significant overall change. Alloy enterprises' operating rates were slightly weaker. Among them, primary aluminum alloy enterprises' operating rates were basically stable, and major secondary aluminum alloy producers' operating rates were also basically stable. Some small and medium-sized secondary aluminum plants cut production due to tight supply of compliant aluminum scrap and high costs.

Overall, the silicon metal market was currently in a stalemate phase of tug-of-war between sellers and buyers, with prices moving sideways. Entering June, supply side, some silicon enterprises in Sichuan and Yunnan are set to resume production, while demand side, downstream polysilicon also has production resumption expectations, with a clear pattern of dual increases in supply and demand. Cost side, bullish sentiment in the silicon coal market was relatively strong, with silicon coal prices in Shanxi and Shaanxi rising by about 50-100 yuan/mt during the week. In the short term, silicon metal prices may continue to move sideways, and attention should be paid to the pace of production resumptions on both the supply and demand sides.

Polysilicon:This week, the polysilicon price index was 33.86 yuan/kg. N-type recharging polysilicon was quoted at 33-35.7 yuan/kg, and granular polysilicon was quoted at 33-34 yuan/kg. Polysilicon prices overall continued to decline this week. The market for dense/recharging polysilicon remained in a state of "quoted prices with no actual transactions." Downstream buyers cautiously selected premium materials based on cost considerations, with more opting to transact in mixed polysilicon or lower-grade materials. A very few orders went as low as around 30 yuan/kg. In the second half of the week, as earlier transactions concluded, the market gradually returned to mediocre conditions. Some extremely low-priced order discounts were withdrawn, but overall prices remained at relatively low levels. Expectations of increased operating rates going forward are placing considerable pressure on polysilicon prices.

Wafer:Wafer prices declined this week, with N-type 183 wafers at 0.88-0.9 yuan/piece, 210R wafers quoted at 0.98-1.00 yuan/piece, and 210mm wafers quoted at 1.18-1.2 yuan/piece. Wafer prices saw a downward adjustment of 0.02 yuan/piece this week. Currently, apart from two top-tier players holding prices firm, most other enterprises are transacting at the low end of the range, and 210R shows a trend of further decline. This round of price decline stems from expectations of falling raw material prices during the rainy season, combined with adjustments in the feedstock mix, which have reduced overall wafer costs. However, unlike previous rounds, this decline has a relatively clear bottom, with limited overall downside room.

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