SMM3, January 1: after the ups and downs in 2017, the silicon metal market in 2018 is facing stricter environmental requirements, shortage of high-quality ores, and devaluation of the RMB against the US dollar. There are a series of problems, such as the increase of new production capacity, the slowdown of consumption growth, the intensification of international competition, the high social inventory and so on. Under the joint action of these long and empty factors, silicon prices operate in a narrow range. With the change of the supply pattern between the north and the south, the seasonal rise and fall of silicon price has become a history. On the contrary, the fluctuation of silicon price is more unpredictable under the disturbance of many factors. Under the background of the introduction of desulfurization and denitrification standards in silicon metal industry and the policy of strictly controlling new production capacity in Xinjiang, not only the clearance rate of backward production capacity will be accelerated, but also the domestic supply pattern is gradually stabilizing.

July-August was the month with the highest export volume this year. At that time, it was rumored that the customs policy would be adjusted from August 1, and the policy change would limit paying for exports. In addition, sea freight charges on some routes will rise seasonally in August, and many traders will place orders in August ahead of schedule in the middle and late July. Later, the actual situation is that the export customs declaration policy has not changed. Under the premise that a considerable number of export orders were issued in advance in July, the export volume remained high in August, and the contribution mainly came from the replenishment of foreign users before the summer break.

From the end of the third quarter, the main export destinations Japan and South Korea, Southeast Asia, Europe, the Middle East and other regional terminal consumption weakened. On the supply side, the devaluation of Brazil's currency is good for its silicon exports, and a factory in South Africa has had to resell more than 10,000 tons of stocks to other countries at ultra-low prices because of problems with long-term delivery. China's silicon export advantage has been weakened.

The weakening of overseas demand has obvious feedback on the number of domestic port warehouse inventory. Huangpu, the largest export port, has seen a marked increase in arrival since late September. By the end of October, all the major warehouses in the port had reached the maximum position, and the arrival vehicles had to wait in line for three to five days before unloading the goods. And in the warehouse clearly informed customers only accept short-term turnover goods, this is more than a month earlier than the warehouse explosion time in previous years. Under the combined action of weakening overseas demand, oversupply at home and traders' misjudgment of bullish hoarding, the warehouse explosion in Huangpu Port lasted until the eve of the Lunar New year in late January 2019.

In the future, the increment of overseas consumption will mainly come from the two major downstream of aluminum alloy and organosilicon. In the first half of 2019, the low-cost production capacity of domestic polysilicon will be released in large quantities. Some foreign polysilicon production capacity will be reduced due to lack of price advantage or forced to reduce production. The purchase of raw materials from China will naturally be reduced, and this part of the export volume will be converted into domestic demand.

Unsurprisingly, the problems caused by chaos such as paying bills and cross-grade delivery to China's silicon metal exports will continue to exist in 2019. as a result, the contribution of metallurgical silicon metal exports to the domestic market will mainly be quantitative. The possibility of a reverse impact on domestic prices is almost non-existent. In contrast, the downstream of the chemical grade has more stringent quality requirements and fewer participants in the trade link, which can affect domestic prices at some point in time of centralized delivery.

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