SMM, Oct. 25: different from the market in previous years, due to the southwest dry silicon plant production reduction ahead of schedule, but fierce overseas competition and weak domestic demand so that many people lack confidence in the rise in silicon prices, SMM forecasts the future for the situation of supply and demand as follows:
Supply: from 23 to 25 October, Sichuan gradually adjusted the electricity price to the flat period, and the electricity price rose 0.05-0.08 yuan / kWh, from the beginning of the month. Yunnan Dehong began to limit electricity this week. Nujiang adjusted the electricity price to the dry season next Friday. The starting load of silicon plants in Liangshan, Yaan, Yunnan, and other places in Sichuan is reduced. By the middle of November, the silicon price, power supply and electricity price will lead to the reduction of the number of furnaces in the two provinces to the level of the dry season. Nearly a month earlier than in previous years.
Some maintenance capacity in Xinjiang, Hunan, Shaanxi and other regions has resumed in the near future, slightly replenishing the supply gap caused by the reduction in production during the dry season in southwest China.
1. Domestic: the operating rate of recycled and primary aluminum alloy has maintained a slow increasing trend, and the year-on-year data are still on the low side. The concentrated maintenance of silicone unit production capacity before and after National Day has basically returned to the normal level. However, it is difficult to maintain the start of construction under the coming winter off-season and depressed price restrictions, and some production capacity plans for annual overhaul at the end of the year are expected to decline. Polysilicon prices hovering at the bottom, the market expected terminal demand season and the actual deviation, polysilicon new capacity release to promote the rise in silicon prices limited.
two。 Abroad: tenders for two large downstream companies are under way in the first half of next year. Due to the decline in overall overseas demand and lower quotations from other sources except China, the competitive advantage of Chinese silicon is not obvious. Since then, large downstream tenders have basically come to an end during the year, and exports for the whole of 2019 remain unchanged from a year earlier, with an expected reduction of 18%-20%.
Lido: supply has shrunk sharply, industry average costs have risen, and social inventories are low compared with the same period last year.
Negative: demand boost is not obvious, overseas competition is fierce, RMB appreciation.
SMM view: after a significant reduction in supply in November, silicon prices will have a small upward space, dragged down by demand, the rising space is limited, the strong market will continue into December.
Others: car sales narrowed in September from a year earlier, according to the China Automobile Association. Production and sales reached 2.209 million and 2.271 million respectively, up 11 per cent and 16 per cent respectively from the previous month, down 6.2 per cent and 5.2 per cent respectively from the same period last year. The decline in production was 5.7 percentage points larger than the previous month, and the year-on-year decline in sales was 1.7 percentage points lower than the previous month. From January to September, car production and sales reached 18.149 million and 18.371 million respectively, down 11.4 per cent and 10.3 per cent respectively from the same period last year, and the decline in production and sales was 0.7 percentage points lower than that in January and August.
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