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High Inventory, Weak Demand: When Will the Decline in Silicon Prices End? [[SMM Weekly Review of Silicon Industry]]

iconApr 30, 2025 18:20
Source:SMM
["[When Will the Decline in Silicon Prices End Amid High Inventory and Weak Demand?]: Silicon Metal: Silicon metal prices continue to fall. Amid sluggish demand from the main consumers of silicone and polysilicon in the downstream, prices of silicone and polysilicon products have also declined, narrowing downstream profits. Coupled with the persistent high inventory in the silicon metal industry that has not been effectively reduced, the cumulative imbalance has not been effectively alleviated, stimulating silicon prices to continue to bottom out."]

 

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SMM News on April 30: Silicon Metal:

This week, the spot price of silicon metal continued to decline, and the lowest point of the main continuous contract in the futures market fell below 8,500 yuan/mt, indicating that the downward trend of silicon metal has not yet stopped. As of April 30, the price of oxygen-blown #553 silicon in east China was 9,300-9,500 yuan/mt, down 200 yuan/mt from last Friday. The price of #441 silicon was 9,500-9,800 yuan/mt, also down 200 yuan/mt from last Friday. On a monthly basis, the price of oxygen-blown #553 silicon in east China fell by 800 yuan/mt or 8% from the end of March, with the decline expanding by nearly 4 percentage points compared to March. In the futures market, the main continuous SI2506 contract closed at 8,540 yuan/mt, down 240 yuan/mt or 2.7% from last Friday, and down 1,245 yuan/mt or 12.7% from the end of March.

In terms of demand, the operating rate of polycrystalline silicon enterprises remained basically stable this week. There will be individual new capacity additions in May, but there will also be enterprises cutting production. It is expected that the operating rate of polycrystalline silicon will decline slightly MoM in the following period. The industry operating rate of silicone enterprises remained basically stable this week, with an estimated industry operating rate of around 60%. Next week, a silicone monomer enterprise in Xinjiang plans to cut production for maintenance, which is expected to last for about 20 days, and the industry operating rate is expected to drop to around 55%. The operating rate of aluminum alloy enterprises remained basically stable, with the inventory level of silicon metal at a low level, and procurement maintained on a need-by-need basis.

The price of silicon metal continued to decline. Against the backdrop of sluggish demand from downstream silicone and polycrystalline silicon, the prices of silicone and polycrystalline silicon products also fell, narrowing downstream profits. Coupled with the persistent high inventory in the silicon metal industry that has not been effectively destocked, the accumulated imbalance has not been effectively alleviated, stimulating silicon prices to continue to bottom out. Under the supply pressure of the slow increase in individual new capacity additions and the approaching rainy season in Sichuan, the bearish sentiment in the market still prevails. Small silicon enterprises, due to their already low operating rates, have limited capacity for further production cuts even if they do so. It is necessary to pay attention to whether there will be larger-scale production cuts on the supply side or improvements on the demand side in the following period.

Polysilicon: This week, the mainstream transaction prices of N-type recharging polysilicon in the market were 37-44 yuan/kg, and the mainstream transaction prices of N-type dense polysilicon were 36-40 yuan/kg, with the N-type polysilicon price index. This week, polysilicon prices continued to fall. The overall sentiment in the polysilicon market remained weak, with the transaction center continuing to move downward. The transaction prices between some top-tier polysilicon enterprises and traders fell by about 4 yuan/kg compared to the quotes at the beginning of March. Some polysilicon enterprises may have new capacity output in May, but several enterprises will also cut production. Overall, the production schedule of polysilicon in May is expected to decline MoM.

Wafer: This week, the price of domestic N-type 18Xmm wafers was 0.98-1.05 yuan/piece, the price of N-type 210R wafers was 1.15-1.2 yuan/piece, and the price of N-type 210mm wafers was 1.35-1.4 yuan/piece. Wafer prices continued to fall this week. The overall market sentiment was poor, with lackluster downstream procurement demand, and battery manufacturers showing a clear "rush to buy amid continuous price rise and hold back amid price downturn" mentality. The production schedules of wafer factories in May varied, with multiple integrated enterprises increasing production due to the inertia of operating rates. Specialized enterprises have significantly cut production due to future concerns. Currently, it is expected that the monthly production in May will decrease by about 10% MoM. The supply of wafers is still expected to be less than demand compared to battery production in May, which is expected to continue destocking. The relatively weak historical inventory pressure of wafers has become the "hope" for wafers to stand firm on quotes. However, it is also necessary to pay attention to the subsequent price trends of polysilicon.

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