SMM Review of Industrial Silicon Industry Chain and Post-Holiday Outlook

Industrial silicon: During the Chinese New Year (CNY), the operating rate of industrial silicon companies weakened slightly due to output reduction and shutdown of some factories in Sichuan and Yunnan. According to SMM survey, the social inventories of silicon metal in Kunming, Tianjin Port, and Huangpu Port totalled 125,000 mt as of January 28, an increase of 2,000 mt compared to pre-CNY level. The market transactions basically stagnated during the holiday. Most silicon factories held a wait-and-see stance on the first day after the holiday, while buyers barely made inquiries. Given ample supply and lagging demand recovery, silicon metal prices will have little upside room.

Polysilicon: Polysilicon enterprises maintained normal production during the CNY holiday, while logistics activities and market transactions stagnated, pushing up the inventories of polysilicon enterprises to nearly 100,000 mt after the holiday. Firm offers of leading polysilicon enterprises and price hikes by downstream producers encouraged some polysilicon enterprises to raise offers. As some module companies plan to ramp up production, polysilicon prices will extend the rally.

Silicone: Silicone plants maintained stable operating rates during the CNY holiday, while downstream producers were closed for the holiday, pushing up the inventory of silicone plants. However, backlog orders before the CNY holiday should allow the inventories to be digested quickly after the holiday. DMC prices are expected to hold stable in the first week after the holiday.

Aluminium alloy: Most producers will resume their production from January 29-31, while a few will not re-open until after the Lantern Festival due to late return of their employees or equipment maintenance. Most producers will take 7-15 days of break for the CNY holiday this year, slightly longer than last year. Primary aluminium alloy enterprises generally maintained normal production during the holiday.