SMM, May 25:
Supply: the biggest change in the supply side in June is in the southwest production area. Sichuan entered the flood season on May 25 and the silicon plant was ignited one after another. Yunnan Dehong silicon plant will gradually open in June. In addition, silicon plants in Baoshan, Lincang and other places will also increase their operating load. It is expected that the number of furnaces in the two provinces will basically return to the level of the flood season in late June.
In addition, because the tension of silica in Xinjiang has been alleviated and the power supply equipment has returned to normal, the starting load of the two large factories will be increased in June as planned, and the start-up of medium-sized enterprises in Yili and other places will be basically stable.
Demand: compared with April, the domestic aluminum alloy operating rate is basically stable, and the main terminal automobile consumption has improved, but it has not yet been transmitted to the enterprises in the upper reaches of the industrial chain. In addition, due to the sharp increase in Shanghai-London aluminum ratio and the shortage of domestic waste aluminum supply during the period from April to May, the aluminum alloy import window opens, and it is expected that a large number of imported aluminum alloy ingots will arrive in June to occupy the domestic aluminum alloy market, and the operating rate of domestic aluminum alloy enterprises may decline.
Silicone monomer start-up load slightly increased, downstream orders improved DMC shipments improved, but some monomer factories due to bearish silicon prices still maintain a half-monthly purchase frequency, in order to reduce raw material inventory.
Polysilicon prices fell to the bottom of most of the production capacity cash cost losses, domestic and foreign maintenance production capacity increased month-on-month, the actual demand for metal silicon decreased.
In May, most of the export markets delayed procurement except for a large aluminum plant tender, and there were sporadic transactions in some major export destination countries. In addition to the weak demand for exports, in addition to the gloom of the overseas epidemic, pessimistic expectations of an increase in domestic supply have also led to some delays in procurement. It is expected that stable foreign trade inquiries will gradually increase in Sichuan and Yunnan in mid-June.
Ledo: southwest drought power supply is tight, Yunnan environmental protection requirements strictly restrict start-up, charcoal supply is tight; monomer start-up increases, terminal demand picks up.
Negative: the supply in Sichuan and Yunnan increases, the average cost of the industry moves down, the demand is weak compared with the same period last year, and the market mood is pessimistic.
SMM point of view: in order to ensure sufficient liquidity turnover, some factories in Yunnan and Sichuan have signed some orders before opening, and some orders signed in prepaid form are lower than the market price. In addition to financial troubles, pre-sale orders also reflect the bearish expectations of production enterprises on the future. With the increase of the supply of goods in the market, it is difficult to support price stability when there is no actual increase in downstream consumption, while the downward shift of production costs in the southwest will intensify the competition among silicon factories. It is expected that from this week, the price of some low-grade silicon will gradually move from local loosening to an overall trend, while metallurgical-grade high-grade and chemical-grade silicon will gradually fall at the pace of monthly bidding in the first and middle of June. Due to the production release process, the silicon price of each brand is mainly slowly lower.
Other: [car sales ended 21 consecutive months of decline in April] car production and sales in April completed 2.102 million and 2.07 million respectively, up 46.6% and 43.5% month-on-month, and 2.3% and 4.4% respectively over the same period last year, the first monthly increase this year. Among them, sales ended 21 consecutive months of decline. From January to April, automobile production and sales completed 5.596 million and 5.761 million respectively, with production and sales falling by 33.4% and 31.1% respectively compared with the same period last year.
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