Silicon Metal Prices To Remain Bearish In April, Even After Rapid Drop In March 

In March, spot silicon metal prices rapidly dropped. As a of April 11, the prices of standard #553 silicon metal at Huangpu Port were 12,900-13,000 yuan/mt (down 1350 yuan/mt or 9% MoM), above-standard #553 silicon metal at 13,200-13,400 yuan/mt (down 1450 yuan/mt or 10% MoM), #421 silicon metal at 13,900-14,100 yuan/mt (down 1250 yuan/mt or 8% MoM), and #3303 silicon metal at 14,000-14,100 yuan/mt (down 1,150 yuan/mt or 8% MoM). As silicon metal prices fell sharply, silicon companies in southern regions and some northern regions suffered losses successively, except for those with cost advantages from their own power supply. Some silicon companies in Gansu, Shaanxi, Xinjiang and other places reduced production and implemented maintenance, while some in Inner Mongolia, Hunan and other places planned to stop production after consuming raw materials. Therefore, the supply of silicon metal is expected to decline in April-May.

The demand from polysilicon continued to increase, but the current poor polysilicon fundamentals (increased polysilicon production in April versus falling silicon wafer production) caused polysilicon prices to continue to fall. As polysilicon companies are expected to suffer losses in April-May, they will push even harder for lower price of upstream silicon metal. The end of a small peak season saw the DMC price fall. DMC plants will slightly increase maintenance in April, and they will purchase silicon metal on demand. The demand from the aluminum alloy industry remained basically stable. The aluminum price rose to more than 20,000 yuan/mt, with the price gap between aluminum and silicon widening to nearly 7,000 yuan/mt. The aluminum alloy industry accepted the silicon price.

SMM statistics showed that the silicon metal social inventory was 370,000 mt, and the total inventory exceeded 600,000 mt together with the inventory held by silicon producers. As the profit of downstream polysilicon and silicone industries shrank, they rejected raw material price rise. It is expected that the silicon metal price are likely to fall rather than rise. Pay attention to the new silicon metal trading rules that may be released by the futures exchange in the near future and their impact on the market.