Operating rates of silicon enterprises in Sichuan and Yunnan increased, and the silicon metal market was under pressure [SMM Silicon Industry Weekly Review]

SMM, June 25: Silicon Metal: This week, spot silicon metal prices were stagnant, with the price center narrowing and in the doldrums. The most-traded futures contract fluctuated at 8,450-8,500 yuan/mt, and its operation center shifted lower WoW. In the spot market, as of June 25, SMM east China oxygen-blown #553 silicon was at 9,000-9,200 yuan/mt, down 50 yuan/mt WoW; #441 silicon was at 9,200-9,400 yuan/mt, down 50 yuan/mt WoW; and #3303 silicon was at 10,100-10,300 yuan/mt, flat WoW. On the quotation side, silicon enterprise quotes remained stable, and most trading firms engaging in both spot and futures market maintained stable spot-futures price spread quotes. As futures fell, the absolute price center weakened, and when futures dropped below 8,500 yuan/mt, transactions of rigid-demand orders in the market increased. From May to June, trucking freight rates from Xinjiang to outside the region trended upward, with further increases expected. For long-distance destinations such as South China, spot-futures price spread quotes remained firm due to high freight costs, and some suppliers slightly raised their quoted spreads.

Demand side, weekly polysilicon production fell WoW. In June, polysilicon enterprises both increased and cut production. Affected by low spot polysilicon prices, the July production schedule is expected to increase only slightly, falling short of previous expectations. Weekly silicone operating rates were slightly weak, with sluggish demand and certain profit margins, DMC prices were under pressure. As some maintenance capacities resume, silicone industry operating rates in July are expected to increase. Weekly operating rates at aluminum alloy enterprises were basically stable. Downstream aluminum alloy was in the off-season with insufficient order growth, and operating rates fluctuated slightly. Ongoing attention is needed on the impact of billing issues on the operating rates of secondary alloy enterprises.

Supply side, in Sichuan and Yunnan regions, silicon enterprises increased operating rates during the rainy season as production resumed. From a supply-demand balance perspective, from June to July, the supply-side increment in silicon metal exceeded the demand-side increment, leading to theoretical inventory buildup. Fundamentals were weak, and with no recent positive news, the silicon metal market lacked upward momentum. Cost support below was limited. Overall, prices fluctuated narrowly and were in the doldrums.

Polysilicon: This week, the polysilicon price index was 32.39 yuan/kg, with N-type recharging polysilicon quoted at 31.5-33.7 yuan/kg, and granular polysilicon at 32-33 yuan/kg. Overall, polysilicon prices continued to fall this week, with extremely limited order signing volumes. Downstream silicon wafer companies had ample inventory, and their expectations for future market weakness led to a general lack of willingness to sign orders. Some manufacturers faced certain sales target pressure, with individual players beginning to sell below 32 yuan/kg. Currently, price cuts have also begun across multiple downstream segments, and market expectations for the upcoming period are weak.

Wafer: Wafer prices declined this week, with N-type 183 wafers priced at 0.85-0.88 yuan/piece, 210R wafers quoted at 0.96-0.98 yuan/piece, and 210mm wafers quoted at 1.16-1.18 yuan/piece. This week, wafer enterprises lowered their quotes, and second- and third-tier players cut prices to sell. The 183 wafer was under the greatest pressure due to battery costs. The main reason for the decline in wafer prices this week was that batteries, disrupted by supply-demand dynamics and silver prices, saw their prices fall below cash costs, thereby putting pressure on wafer procurement. Some small enterprises with tight cash flow were forced to sell at low prices. To our knowledge, multiple top-tier players plan production cuts in July, and it is said that an accident occurred at a certain enterprise's Qinghai base, which will have some impact on the current month's output.
 

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