Spot Silicon Metal Prices Likely to Remain Firm

This week, mainstream spot silicon metal prices remained stable, with some specifications seeing price increases. As of October 24, above-standard #553 silicon metal in east China was 11,700-11,900 yuan/mt, flat WoW. #521 silicon metal was 12,000-12,200 yuan/mt, up 150 yuan/mt WoW. #441 silicon metal was 11,900-12,100 yuan/mt, flat WoW. #421 silicon metal (for silicone) was 12,700-13,000 yuan/mt, up 150 yuan/mt WoW. #3303 silicon metal was 12,600-12,800 yuan/mt, flat WoW. This week, market sentiment for silicon metal was warm, mainly influenced by favorable policies and financial sentiment in the PV industry. The Si2412 contract showed a strong trend, reaching a high of 13,220 yuan/mt during the week, up 755 yuan/mt or 6% from last Friday's closing price. Following the strong performance of futures prices, silicon companies in Xinjiang and other regions increased hedging sales in cooperation with futures traders. Due to rising costs as silicon enterprises in south-west China enter the dry season and lack of profits at current prices, most silicon enterprises in south-west China plan to reduce or halt production by the end of October or November. Overall, silicon metal companies are actively raising quotes. In terms of market transactions, after the price increase, downstream buyers showed moderate sentiment of rushing to purchase amid continuous price rise, with new orders being released slowly and transactions remaining stagnant.
From the supply-demand fundamentals, supply is significantly greater than demand. However, in terms of spot liquidity, on one hand, Xinjiang companies have increased hedging, and on the other hand, companies in the southwest are holding back cargoes. Therefore, despite high operating rates in the north and weak downstream demand, the market liquidity of most cargoes is restricted. In the short term, spot silicon metal prices will remain firm, with some grades likely to see slight increases.