SMM July 8: today SMM East China oxygenated 55 silicon mainstream price in 10400 Mel 10600 yuan / ton, 42m Si tender price in 10900 Mel 11100 yuan / ton. It is rare that there is a downstream receiving price of 42m silicon at 10700 yuan per ton on the market, as well as individual orders for oxygenation at almost the same price. The reasons for SMM analysis are as follows:
1. Supply difference
The production of metallurgical grade low-grade oxygen-free 55 silicon is mainly concentrated in Sichuan and Yunnan, which was previously supplied in Chongqing, Fujian and other places, but the two silicon plants cut production in June because of losses. And at the end of 2019, Liangshan Prefecture, Sichuan Province, eliminated 9 16 6300kVA ore reheating furnaces, reducing the annual supply by about 30, 000 tons. Before that, Liangshan was the producing area with the highest concentration of oxygen-free 55 silicon in the country.
The production of oxygenated 55 silicon and other external silicon is mainly concentrated in Xinjiang, and there is also a small supply in Yunnan, Sichuan and other provinces. After the production of Xinjiang Dachang reduced production in June, Xinjiang oxygenated low-grade silicon was mainly digested by Xinjiang Inner Mill, and the surplus was supplied to the rest of the lower reaches of the north. This is also the main reason why the price of oxygenated low-grade specifications such as oxygenated 55 silicon in northern ports in June is higher than the average of 100 yuan / ton in southern ports.
Different from the reduced supply of metallurgical grade low-grade silicon, the silicon factories supplying domestic organosilicon monomer plants are mainly concentrated in Sichuan, and there are also a small amount of supply in Yunnan, Xinjiang, Inner Mongolia and other provinces. After adjusting the electricity price to the flood season in Sichuan in June, the number of silicon factories in the province increased significantly, while the centralized parking and maintenance of domestic single manufacturers increased the shipping pressure of the silicon plant.
2. Differences in trading habits
Metallurgical grade silicon is mainly downstream for aluminum alloy and grinding plants, except for a few large factories in the form of monthly bidding, most aluminum alloy factories are sporadic procurement. Under the pressure of sluggish demand and subsequent increase in supply, silicon prices have almost continued the downward trend since March this year. Almost all aluminum alloy and grinding enterprises have increased their procurement frequency in order to reduce the pressure on inventory, and the monthly bidding has been changed to weekly. Some small downstream would rather risk stopping production than increase the inventory of raw materials. As the price of silicon metal is close to the production cost, the pessimistic mood in the market has warmed slightly, since last week, some traders have released the backlog of orders in their hands, and some downstream have seen that silicon prices have stabilized and begun to return to normal purchasing frequency. as a result, the number of purchases per purchase has increased. The above reasons directly lead to more orders in the hands of silicon factories in the past two weeks, with a short delivery time of 5 days and a long period of about 10 days.
On the other hand, chemical-grade silicon maintains the way of monthly purchase, which can basically maintain the monthly frequency except that there is a delay in the purchase time of some silicone plants, so the price fluctuation of chemical-grade silicon usually lags behind that of metallurgical-grade silicon.
Due to the different supply and consumption downstream of metallurgical grade low-grade silicon and chemical grade silicon, the price difference between different specifications narrowed, and even the extreme price convergence of oxygen-ventilated 55 silicon and 42 silicon. SMM believes that the current deadlock will be broken when the production of large northern factories is gradually released.
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