After Slight Increases, Silicon Metal Prices Lacked Momentum, Spot Trading Was in A Stalemate [SMM Weekly Review]

This week, spot silicon metal prices stayed largely stable. Today, in east China, above-standard #553 silicon metal was priced at 11,700-11,800 yuan/mt, up 50 yuan/mt WoW; #441 silicon metal was priced at 11,800-12,000 yuan/mt, unchanged WoW; #421 silicon metal (for silicone use) was priced at 12,600-12,800 yuan/mt, up 100 yuan/mt WoW; and #3303 silicon metal was priced at 12,600-12,700 yuan/mt, unchanged WoW. After the quote increase, silicon enterprises mainly maintained stable quotations this week, and the trading volume in the market significantly decreased. On one hand, most downstream users had gradually replenished their safety stock earlier, and after the price increase, they mainly adopted a wait-and-see attitude to consume their inventory. On the other hand, traders found it difficult to raise the selling price due to the low acceptance of the price by downstream users, resulting in a low willingness to purchase and a strong willingness to sell. Most silicon enterprises had little inventory pressure and maintained firm quotations, leading to a stalemate in the back-and-forth negotiations between upstream and downstream.

Demand side, polysilicon enterprises saw slight fluctuations in operating rates during the week. As the impact of power rationing in Sichuan was eliminated, polysilicon capacity returned to normal operation, while other operating capacities stayed largely stable. Silicone enterprises maintained stable operating rates this week. Luxi's 400,000 mt monomer capacity started trial production in late August and is proceeding in an orderly manner. If production goes smoothly, it is expected to reach full capacity by the end of October. Aluminum-silicon alloy enterprises maintained stable operating rates this week. With the arrival of the September peak season, the downstream market demand for aluminum-silicon alloy did not show a significant increase. Some silicon enterprises in east China reported a slight recovery in orders, and the industry's operating rate is expected to slowly rebound.

The SI2411 silicon metal contract fluctuated downward, hitting a low of 9,410 yuan/mt during the week. Downstream users of silicon metal reduced their inventory, leading to a decrease in spot market trading volume and a cooling market sentiment. Some silicon enterprises reported little inventory pressure and focused on fulfilling orders in the next 1-2 weeks. The silicon metal market remained in a stalemate between upstream and downstream, and spot prices are expected to remain stable in the near term.