Bulls Reduced Positions as Silicon Metal Prices Weakened, Polysilicon Prices Remained Generally Stable [SMM Silicon Industry Weekly Review]

SMM May 14 News:Silicon Metal:Spot prices were mostly stable this week, with prices of some silicon specifications slightly adjusted downward. As of May 14, SMM east China oxygen-blown #553 silicon was at 9,200-9,400 yuan/mt, down 50 yuan/mt WoW; #441 silicon was at 9,400-9,600 yuan/mt, flat WoW; #3303 silicon was at 10,100-10,300 yuan/mt, flat WoW. Futures market sentiment cooled. In terms of total open interest, it began to decrease significantly from Tuesday, as funds took profits and exited, causing futures prices to pull back. On Thursday (May 14), total open interest in silicon metal stood at 450,000 lots, down 85,000 lots or 16% from Monday. The most-traded SI2609 contract closed at 8,655 yuan/mt on Thursday, down 455 yuan/mt or 5% from Monday, with the silicon metal market returning to fundamentals-driven logic. In terms of market transactions, downstream users had strong wait-and-see sentiment amid this round of price fluctuations, and transactions were mainly driven by rigid restocking demand.

Demand side, polysilicon operating rates were basically stable this week, with no significant change in polysilicon production in May. Recently, some silicon powder orders were released, but polysilicon producers had strong sentiment to push for lower prices. Attention should be paid to subsequent silicon powder order transactions. Silicone weekly operating rates were basically stable, with basically stable demand for silicon metal. Aluminum alloy weekly operating rates were weak. Affected by recent strict inspections on invoicing practices, coupled with reduced orders from downstream die-casting enterprises, some secondary aluminum alloy enterprises cut production or halted operations, impacting secondary aluminum alloy operating rates and capacity.

Supply side, some northern silicon plants temporarily suspended operations for furnace maintenance this week, affecting short-term production. Supply is expected to gradually recover next week. Combined with expectations for production increase at some southwest silicon enterprises in June, the certainty of increased silicon metal supply in June is relatively strong. Supply and demand were basically balanced in May. In June, the expected supply increase is expected to exceed demand increase. From a fundamental perspective, weak demand suggests silicon metal prices will be biased to the downside before shifting to move sideways. Attention should be paid to whether new price drivers emerge subsequently.

Polysilicon:The polysilicon price index was 35.05 yuan/kg this week. N-type recharging polysilicon was quoted at 34.1-36.1 yuan/kg, and granular polysilicon was quoted at 34-36 yuan/kg. Overall polysilicon prices remained stable this week, with extremely limited market changes. Overall order signing in the market was low, and some rumors of low prices were later confirmed to be untrue. Cost meetings gradually became the market's focus of attention. Leading polysilicon enterprises held firm at 35 yuan/kg. Meanwhile, the market was also watching the resumption of operations at a certain top-tier player during the rainy season.

Wafer:Wafer prices were largely stable overall this week. Specifically, N-type 183 wafer prices were at 0.9-0.93 yuan/piece, 210R wafer quotes were at 1.00-1.03 yuan/piece, and 210mm wafer quotes were at 1.2-1.23 yuan/piece. Recently, it was reported that a top-tier player closed deals on 210R wafers at 1.02 yuan/piece, which were customized sizes and thus priced slightly above normal levels. Currently, mainstream prices for 210N and 210R still lean toward the lower end of the range, with 183 wafers transacted at 0.92 yuan/piece. In addition, wafer enterprises have recently been ramping up production to match demand, and overall wafer shipments have also improved slightly, while upstream finished product inventories edged up marginally. Wafer prices are expected to remain largely stable for a period of time, pending whether rising silver prices can drive battery price increases.

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