Silicon metal main continuous contract falls below 8,000 yuan/mt, where is the market heading? [SMM Silicon Industry Weekly Review]

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SMM News on May 22: Silicon Metal:

This week, the spot price of silicon metal continued to weaken. In the futures market, the main silicon metal contract fell below 8,000 yuan/mt, closing at 7,880 yuan/mt on May 22, down 530 yuan/mt WoW, or 6%. In the spot market, some suppliers lowered their quotes to sell. SMM's oxygen-blown #553 silicon metal in east China was priced at 8,500-8,800 yuan/mt, down 450 yuan/mt WoW, while #441 silicon metal was priced at 9,000-9,100 yuan/mt, down 300 yuan/mt WoW. Silicon metal prices continued to hit new historical lows, and market transaction sentiment improved somewhat. From the perspective of social inventory, more cargo was shipped from social warehouses in multiple regions over the past week, and inventory decreased WoW. There are expectations of increased supply due to the resumption of production of some silicon metal capacities in Sichuan and Yunnan in late Q2 and Q3, coupled with an increase in the operating rate of some silicon enterprises in the north. Demand fluctuations on the demand side are limited. Therefore, despite prices being at extremely low levels, market sentiment remains cautious under supply pressure.

On the demand side, the operating rate of polysilicon remained basically stable this week, with individual silicon powder tender orders released. Attention should be paid to the transaction status of silicon powder. The operating rate of silicone increased slightly WoW, with some monomer enterprises completing maintenance of their facilities. The industry's operating rate is expected to rise above 60%. The operating rate of aluminum-silicon alloy enterprises remained stable, with purchasing as needed for silicon metal.

On the cost side, the prices of silicon coal and electrodes both decreased in May compared to the previous period. However, as silicon metal prices also fell, the losses of silicon enterprises have not eased. There are expectations of an upward increase in supply on the supply side, while demand on the demand side is largely stable. In the short term, there is insufficient momentum for prices to stop falling and rebound, and silicon metal prices will remain low.

Polysilicon: This week, the N-type polysilicon price index was 35.4 yuan/kg, with N-type recharging polysilicon priced at 35-38 yuan/kg and N-type mixed polysilicon priced at 31-36 yuan/kg. Polysilicon prices fell. Market transactions gradually picked up this week, with polysilicon prices ultimately falling in this round of order signing. The price of mixed polysilicon fell more significantly, with the average price of some orders containing broken materials dropping below 30 yuan/kg. High-quality dense recharging polysilicon remained relatively resilient, with some orders holding firm at 35 yuan/kg after negotiation. There may still be orders signed subsequently. Currently, there are signs of stabilization in the wafer and battery sectors, which may provide some support for polysilicon prices (especially high-quality materials). However, some manufacturers' mixed polysilicon containing cauliflower and coral materials may still have some room for downward adjustment.

Wafer: This week, the price of N-type 183 wafers was 0.93-0.95 yuan/piece, the price of 210R wafers was 1.05-1.1 yuan/piece, and the price of 210 wafers was 1.25-1.3 yuan/piece. The price center of wafers has shifted downward, with some top-tier enterprises already offering quotes of 0.93 yuan/piece for 183 wafers. The pressure on other manufacturers continues to increase, and there may be further room for decline. However, due to cost factors and limited supply in the upstream and downstream sectors, coupled with the expectation of a certain degree of recovery in end-use demand in the later part of Q3, the downward space is expected to be very limited.

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