Silicon Metal Spot Price Firmed Slightly Then Stabilized[SMM Silicon Industry Weekly Review]

SMM, August 13:Silicon metal:This week, spot silicon metal prices edged up and then stabilized, while futures price center moved up WoW. SMM east China oxygen-blown #553 silicon was at 9,100-9,200 yuan/mt, up 100 yuan/mt WoW; #441 silicon was at 9,200-9,400 yuan/mt, up 50 yuan/mt WoW; and #3303 silicon was at 10,000-10,200 yuan/mt, flat WoW. In the futures market, the most-traded SI2609 contract closed at 8,575 yuan/mt in Thursday's late session, up 150 yuan/mt WoW. Regarding open interest, silicon enterprises priced shipments on a basis against the November contract; open interest in the SI2609 contract continued to decline, while open interest in the SI2611 contract kept increasing. In terms of weighted open interest, Thursday's weighted open interest was 413,000 lots, up 25,000 lots WoW. In terms of market quotes and transactions, silicon enterprises kept offers firm. Coupled with futures gains, low-priced offers in the market decreased. After prices rose, downstream purchasing sentiment stayed subdued, with buying mainly limited to digesting earlier low-priced orders or just-in-time procurement. The SI2611 contract rose to around 8,650 yuan/mt. Some silicon enterprises in northwestern China sold to futures-and-spot traders on a basis, with relatively limited shipments; some silicon enterprises showed limited willingness to sell because prices had not risen to their desired selling levels.

Demand side, weekly polysilicon production was basically stable WoW. During the week, polysilicon enterprises raised their quotes again, but this was mainly quote-based with very few actual transactions. Polysilicon enterprises' production schedule expectations remained unchanged, and their demand for silicon metal stayed stable. Recently, the reported higher polysilicon prices had very limited effect in driving silicon metal prices higher. The weekly operating rate for silicone edged down WoW. Under an emission-reduction consensus, some monomer producers cut production and reduced loads; the industry operating rate is estimated at around 60%, a limited decline. Weekly operating rates at leading aluminum-silicon alloy enterprises were slightly weak, mainly because short-term high temperatures and typhoon and rainstorm weather disrupted production at a small number of enterprises. Across the industry, aluminum alloy operating rates were basically stable.

In early August, the supply contraction from silicon enterprises' production cuts and the bullish price-hike driver from PV policy had already been priced in for this stage; after the price increase, silicon metal futures prices shifted to narrow sideways movement. Fundamentals have improved in August, and there is fairly strong support below prices, limiting downside room. If there is no new positive catalyst on the upside, upward price momentum is insufficient, making a sustained trend rally difficult; the tug-of-war between longs and shorts may shift prices into consolidation.

Polysilicon:This week, the polysilicon price index was 39.47 yuan/kg; N-type recharging polysilicon was quoted at 37.9-41 yuan/kg, and granular polysilicon was quoted at 39-40 yuan/kg. Polysilicon market prices rose this week, mainly because of higher quotes. Currently, some top-tier players are trying to offer quotes to the market, but downstream players are taking a wait-and-see stance, and factory-to-factory trading volume is extremely low. Recently, there have been frequent meetings on costs and energy consumption, and most manufacturers are still in the exploratory stage of policy implementation. Some downstream quotes have also risen accordingly, and the market will continue to watch policy implementation going forward.

Wafer: This week, wafer prices were raised sharply, with N-type 183 wafer prices at 0.819-0.885 yuan/piece, 210R wafer quotes at 0.916-0.978 yuan/piece, and 210mm wafer quotes at 1.117-1.182 yuan/piece. Wafer prices registered a notable increase this week, as two top-tier players resumed quoting and sharply raised their offer prices. This round of price increases was mainly driven by the impact of polysilicon cost policies, as well as by the fact that battery prices rose due to supply-demand factors. Going forward, we need to watch how actual transactions develop after this round of wafer price increases and the direction of upstream policy changes.

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