This week, silicon metal prices continued to decline. These are silicon metal prices (by type) as of July 18 and their WoW changes: standard #553 silicon metal in East China (11,800-12,000 yuan/mt, -200 yuan/mt or -2% WoW), above-standard #553 silicon metal (12,000-12,300 yuan/mt, -300 yuan/mt or -2% WoW), #441 silicon metal (12,500-12,700 yuan/mt, -300 yuan/mt or -2% WoW), and #421 silicon metal for silicone (13,100-13,300 yuan/mt, -250 yuan/mt or -2% WoW). During the week, the most-traded Si2409 silicon metal contract continued to decline, hitting a low of 10,425 yuan/mt. The futures price decline promoted the release of downstream orders for rigid demand, mainly with the increase in transactions of non-delivery silicon metal (Si≥99%). On the other hand, after the futures price decline, silicon producers saw a decrease in orders. With the decline in silicon prices, panic spread among some producers, leading to a follow-up price reduction under existing inventory pressure. Therefore, the spot prices of silicon metal ran weak. On Wednesday and Thursday, there were rumours about production cuts by leading companies, but none were confirmed. Currently, the fundamentals show a loose supply and high inventory awaiting digestion. Even if small-scale production cuts occur, the impact on supply and demand would be minimal. Most downstream and traders adopted a wait-and-see approach.
In July, the spot price of silicon metal entered a downward channel, continuously falling below the cost line of silicon producers. Currently, the production cuts and suspensions due to losses are mainly among standard silicon metal producers, silicon metal (Si≥97%) plants, and secondary silicon companies. Above-standard silicon producers have not yet seen large-scale production cuts. It is expected that the price of silicon metal will continue to fluctuate downward next week. Attention should be paid to the production of leading companies, the impact of related sentiment, and new transactions for silicon powder.
