Silicon spot market swung on a subdued note in October. As spot prices exceeded futures prices, downstream buyers aimed to meet rigid demand and consume inventory. On October 26, above-standard 553# silicon metal prices in East China were at 15,100-15,200 yuan/mt, while silicon metal 2311 futures contract hovered around 13,300 yuan/mt, and 421# silicon metal warrant prices in East China were at around 15,300 yuan/mt. As futures price was at large discounts against spot prices, downstream buyers rushed to buy warrants, leading to an increase in cancelled warrants.
Supply: The operating rate of silicon plants still inched up in October. There was ongoing restart and newly added capacity of Xinjiang-based major silicon plants. Yunnan and Sichuan gradually headed into dry season at the end of October, making for rising electricity prices and shrinking power supply. In Nujiang, Yunnan, some submersible arc furnaces went offline in late October, while other silicon plants kept operating rate stable. The operating rate of silicon plants will hinge on power supply, electricity price and costs.
Demand: There was sustained polysilicon capacity uptick. According to SMM data, polysilicon production is expected to be 143,000 mt in October, up 6% MoM, and 150,000 mt in November, up 5% MOM. More silicon demand will linger in polysilicon market in Q4, even though polysilicon price fell due to weakening of downstream sectors. Demand from silicone turned to be muted with October coming to an end. There was scheduled maintenance of some DMC plants in November, while DMC plants’ inventory increased slowly. Under this circumstance, DMC market softened. The operating rate of aluminium alloy plants was stable. With insufficient downstream demand, small aluminium alloy producers will mildly lower operating rate in November, except for large ones who will still keep operating rate stable.
Bullish factors: There will be relentless polysilicon demand hike, elevated costs during the dry season in Sichuan and Yunnan, and expected silicon production cuts.
Bearish factors: There will be cancelled warrants of silicon metal and muted demand from silicone.
SMM comments: Silicon supply (including off-grade silicon (Si ≤ 97%) and secondary silicon) and demand will be basically balanced in November. Inventory of upstream and downstream sectors will be not high compared with previous years. In addition, a slew of cancelled warrants will pile mounting pressure on market supply in November, leading to supply surplus. Transaction prices of some silicon powder orders were discussed at lower level at the end of October. It is expected that silicon market will swing on a soft note in November. Electricity price uptick in Sichuan and Yunnan from November to December will push costs higher. Moreover, silicon inventory pressure will be relatively small. Therefore, silicon prices should be able to rebound rapidly if they fall too much.
According to customs data, the total export volume of Chinese silicon metal in September was 51,300 mt, up 18% MoM and 4% YoY, bringing total exports in the first nine months of 2023 up to 430,300 mt, down 16% YoY.
According to data from the China Association of Automobile Manufacturers, in September 2023, China’s auto production and sales hit a record high for the same period in history, and new energy vehicles and auto exports continued to perform well. In September, the output and sales of automobiles stood at 2.85 million units and 2.858 million units, respectively, both up 10.7% MoM, and up 6.6% YoY and 9.5% YoY. For January-September, the output and sales of automobiles stood at 21.075 million units and 21.069 million units respectively, up 7.3% YoY and 8.2% YoY.
![[Analisis SMM] Harga Batu Bara Melonjak, Mendorong Kenaikan Biaya Kalsium Mentah](https://imgqn.smm.cn/usercenter/pAOxy20251217171725.jpg)
