Gloomy Market Outlook, Weakness Persists in Silicon Metal Market [[SMM Silicon Industry Weekly Review]]

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SMM News on May 8: Silicon Metal:

This week, the futures and spot markets for silicon metal continued to decline, with prices breaking through lower levels, casting a gloomy shadow over the market. As of May 8, SMM's oxygen-blown #553 silicon metal in east China was priced at 9,000-9,300 yuan/mt, down 250 yuan/mt from before the holiday. #441 silicon metal was priced at 9,300-9,500 yuan/mt, down 250 yuan/mt from before the holiday. #421 silicon metal (used in silicone) was priced at 10,900-11,100 yuan/mt, down 100 yuan/mt from before the holiday. There were significant differences in quotes from different suppliers, leading to market price confusion. The transaction price for low-priced oxygen-blown #553 silicon metal in the downstream fell below 9,000 yuan/mt. In the futures market, the main SI2506 contract was in the doldrums, closing at 8,315 yuan/mt at the end of the day on May 8, down 225 yuan/mt or 2.6% from before the holiday. Inquiries from downstream users and traders of silicon metal were active, but transactions were still mainly on a need-to basis.

In terms of demand, the operating rate of polysilicon enterprises remained largely stable. After the holiday, polysilicon enterprises focused on digesting inventories. With the decline in silicon lump prices, there is also downward pressure on subsequent silicon powder prices. The operating rate of silicone enterprises increased slightly on a WoW basis this week, mainly due to a monomer plant resuming production ahead of schedule this week (originally scheduled for next week). A monomer plant in Xinjiang implemented production cuts in batches. Therefore, on balance, the operating capacity of silicone monomer plants increased this week compared to last week. However, on a monthly basis, the operating rate in May is weaker than in April. The operating rate of aluminum-silicon alloy enterprises declined slightly. On the one hand, a small number of secondary aluminum alloy manufacturers were on holiday for 2-3 days, affecting short-term changes in the operating rate. On the other hand, as the traditional peak season ended, end-use demand weakened seasonally.

From the cost side, silicon metal futures prices hit new lows again, with the vast majority of silicon metal production capacity experiencing cash flow losses, making production difficult for enterprises. Price support requires more production cuts from the supply side. In terms of sentiment, existing issues such as high inventories and weak supply and demand have not been alleviated. Downstream demand remains sluggish, and silicon enterprises face difficulties in selling their products. Negative sentiment still dominates the market. Silicon metal prices continue to hover near the bottom.

Polysilicon: This week, the mainstream transaction prices for N-type recharging polysilicon in the market were 37-44 yuan/kg, with the N-type polysilicon price index at 37.28 yuan/kg. The price center of polysilicon declined slightly this week, mainly due to weakened sentiment at the beginning of the week. Subsequently, as the futures market collapsed, market sentiment was further affected. Top-tier enterprises began to show signs of standing firm on quotes to support the market, with some top-tier enterprises suspending their quotes. The concentrated transaction period in the market after the holiday has passed, with limited transactions and most market participants maintaining a wait-and-see attitude.

Wafer: This week, domestic N-type 18Xmm wafers were priced at 0.95-1.05 yuan/piece, N-type 210R wafers at 1.15-1.2 yuan/piece, and N-type 210mm wafers at 1.35-1.4 yuan/piece.The overall market sentiment is poor, with moderate downstream procurement demand. The price of 183 wafers has fallen again, with individual prices reaching 0.95 yuan/piece. Market transactions were moderate during the Labour Day holiday, with top-tier enterprises maintaining orders at 1 yuan/piece. After the holiday, as downstream market conditions weakened, the wafer market followed suit with price declines. The latest production schedule for wafers in May is approximately 55GW+, showing a decrease compared to April MoM.

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