Silicon Metal Prices Moved Sideways, Focus on Operating Rate Changes on Both Supply and Demand Sides [SMM Silicon Industry Weekly Review]

SMM May 21 News:Silicon Metal:At the beginning of the week, spot silicon metal prices moved slightly weaker before shifting to move sideways. As of May 21, SMM east China oxygen-blown #553 silicon was at 9,100-9,200 yuan/mt, down 150 yuan/mt WoW; #441 silicon was at 9,300-9,400 yuan/mt, down 150 yuan/mt WoW; #421 silicon (used in silicone) was at 9,400-9,800 yuan/mt, down 50 yuan/mt WoW; #3303 silicon was at 10,100-10,300 yuan/mt, flat WoW. The futures market center pulled back WoW. On Thursday, the most-traded SI2609 contract closed at 8,440 yuan/mt, down 215 yuan/mt WoW. Open interest of the most-traded contract stood at 308,000 lots, a decrease of 7,000 lots WoW. In terms of market transactions, futures weakened at the beginning of the week, and some downstream buyers and traders increased rigid demand purchases, with the market transaction center shifting lower WoW. On fundamentals, both supply and demand of silicon metal are expected to increase in June. On the supply side, the increase is mainly driven by higher operating rates of silicon enterprises in Sichuan and Yunnan during the rainy season. On the demand side, the increase is mainly driven by production resumption expectations of individual polysilicon enterprises.

Demand side, polysilicon operating rates remained flat WoW this week. Recently, news about a leading polysilicon enterprise resuming production circulated in the market. It is expected to gradually start feeding and producing from June, which will effectively drive the increase in silicon metal consumption in June and Q3. Attention should be paid to changes in polysilicon enterprise operating rates. The weekly operating rate of silicone enterprises was slightly weaker, mainly due to load reduction and maintenance at individual monomer plants. From the overall perspective of May, the silicone industry operating rate increased compared to April, showing a positive increase in silicon metal consumption. The weekly operating rate of aluminum alloy enterprises was slightly weaker, mainly suppressed by both high costs and weak demand. Cost side, compliant aluminum scrap supply was tight; demand side, end-use demand release was insufficient, and some small and medium-sized plants reduced or halted production.

Supply side, individual silicon enterprises resumed production as expected this week, and weekly silicon metal production increased WoW. With both supply and demand increasing, prices remained stagnant. Cost side, Taiwan coke and silicon coal prices in some regions edged slightly lower recently, but the adjustment was relatively small and had no significant impact on costs. Recently, silicon metal prices shifted to mainly move sideways. Going forward, attention should be paid to changes in silicon metal operating rates and the implementation of polysilicon production resumption plans.

Polysilicon:This week, the polysilicon price index was 34.275 yuan/kg. N-type recharging polysilicon was quoted at 33-36 yuan/kg, and granular polysilicon was quoted at 34-36 yuan/kg. Polysilicon prices declined overall this week. Prices were relatively stable at the beginning of the week. Later, as the production resumption pace of leading manufacturers was released, combined with procurement demand from some downstream manufacturers, market transactions gradually unfolded. Affected by pessimistic supply-demand expectations, actual order signing prices pulled back slightly, with some average order signing prices falling to 32-33 yuan/kg. Some manufacturers postponed maintenance in May, and new manufacturers are set to resume production in June, potentially increasing supply pressure.

Wafer:Wafer prices declined this week. Specifically, N-type 183 wafer prices were in the range of 0.9-0.92 yuan/piece, 210R wafer prices were quoted at 0.98-1.02 yuan/piece, and 210mm wafer prices were quoted at 1.2-1.22 yuan/piece. Recently, the lower end of the wafer price range was revised downward, and the trend does not possess reversible conditions. The fundamental reason driving this phenomenon is a change in the material usage structure, which in the long term is unfavorable for sustainable development. This round of industry chain price declines originated from price wars at the module end. In the medium and long-term, if policy expectations continue to weaken, the wafer segment may enter a downward cycle.

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