Market Pessimism Persists, Silicon Metal Prices Continue to Decline [SMM Weekly Review]

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SMM, December 19: Spot silicon metal prices continued to decline this week, and the silicon metal futures Si2502 contract hit a new low. The silicon market sentiment was concerned about when silicon prices would stop falling. As of December 19, above-standard #553 silicon metal in east China was at 11,300-11,400 yuan/mt, down 200 yuan/mt WoW; #441 silicon was at 11,600-11,800 yuan/mt, down 200 yuan/mt WoW; and #3303 silicon was at 12,200-12,400 yuan/mt, down 250 yuan/mt WoW. In the futures market, on December 19, the Si2502 contract hit a low of 11,305 yuan/mt and closed at 11,315 yuan/mt. The futures market continued its downward trend for several consecutive days, causing market sentiment to become chaotic. Some were concerned about when silicon prices would bottom out, while others developed a buying sentiment. However, opinions on the future price trend remained rational. During the week, downstream users' purchasing sentiment remained average, and the market trading atmosphere was relatively subdued.

On the demand side, the operating rate of polysilicon enterprises continued to weaken slightly, and polysilicon prices were expected to show an upward trend in the price center. The weak operating rate of polysilicon enterprises meant that the incremental demand for silicon metal from December to January 2025 provided limited support. The operating rate of silicone enterprises was basically stable. Recently, the price of raw material #421 silicon metal declined, while DMC prices remained stable due to rising costs of raw materials such as methyl chloride and methanol. As a result, the profitability of monomer plants did not improve, leading to cautious procurement prices for silicon metal. The operating rate of aluminum-silicon alloy fluctuated slightly. The operating rate of primary aluminum-silicon alloy remained basically stable, while the operating rate of secondary aluminum-silicon alloy slightly declined due to environmental protection impacts and tight aluminum scrap supply in certain regions. Currently, the aluminum-silicon price spread is above 8,000 yuan/mt, and silicon metal is procured as needed.

The accelerated decline in silicon metal prices has gradually increased production pressure on northern silicon enterprises. Sellers and buyers may re-enter a stalemate and bargaining phase. In the near term, silicon metal prices may narrow their decline and stabilize.

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