Silicon metal raw material market remains weak, with petroleum coke prices continuing to decline in the short term [SMM Weekly Review of Silicon Metal Raw Materials]

Silica: The silica market was in the doldrums this week, with prices showing regional differentiation and overall market trading remaining sluggish. In terms of supply, the loose pattern persisted, with high inventory levels at mine mouths. Demand remained weak, with operating rates at silicon metal plants in regions such as north-west and north China remaining low. There was also limited demand for silica in south-west China due to fewer resumptions during the rainy season. Additionally, the recent continuous decline in silicon metal prices has led to a strong sentiment among buyers to drive down raw material prices, further compressing the bargaining space for silica producers. Currently, the mine-mouth price of high-grade silica in Inner Mongolia ranges from 310-350 yuan/mt. In Yunnan, the mine-mouth price of low-grade silica ranges from 320-340 yuan/mt. In Guizhou, the mine-mouth price of high-grade silica ranges from 280-320 yuan/mt. In Hubei, the mine-mouth price of high-grade silica ranges from 340-380 yuan/mt.

Silicon coal: Prices of silicon coal in multiple regions declined again this week, primarily due to the impact of the price reduction of coking coal. Recently, coking coal prices fell by 60 yuan/mt, leading to adjustments in silicon coal prices across various regions. Currently, the average price of silicon blended coal in Gansu has dropped to 870 yuan/mt, a decrease of 100 yuan/mt. The average price of granular coal has fallen to 1,000 yuan/mt, a decrease of 130 yuan/mt. In Ningxia, the average price of silicon blended coal has decreased to 900 yuan/mt, a drop of 60 yuan/mt, while the price of granular coal stands at 1,140 yuan/mt, also down by 60 yuan/mt. The average price of granular coal (with 5-6% ash content) has decreased to 1,310 yuan/mt, a reduction of 60 yuan/mt. On the supply side, supply remains relatively sufficient, with the market under pressure and operating in a weak pattern. Producers are facing increased sales pressure, and market trading activity remains low. On the demand side, it continues to show weakness. Due to the sluggish silicon metal market, overall demand has continued to weaken. Purchases are mainly for immediate needs and restocking, with a strong sentiment to drive down prices.

Petroleum coke: The petroleum coke market was relatively mediocre this week, with refinery shipments performing poorly and prices continuing to decline. According to SMM data, the average price of petroleum coke at local refineries was approximately 2,267 yuan/mt, showing a MoM decline of about 6%. Trading of Formosa Plastics petroleum coke was relatively mediocre this week, with poor downstream purchasing sentiment. Currently, the market price ranges from 1,100-1,150 yuan/mt. Overall, as it is month-end, downstream purchasing sentiment in the petroleum coke market remains cautious, and prices are expected to continue to decline in the short term.

Electrodes: Prices for some specifications in the electrode market continued to face downward pressure this week. On the supply side, affected by sluggish shipments, high inventory levels, and declining raw material prices, most producers have initiated production cuts or suspensions, currently focusing mainly on inventory depletion. Additionally, due to the weakening support from the raw material side, raw material prices have declined sharply since May. However, due to the time lag between the electrode production cycle and raw material procurement, the collapse in raw material costs has only recently been reflected in current selling prices, leading producers into a loss-making situation of producing with high-cost raw materials and selling finished products at low prices. Demand side, both lines are weak. Firstly, the operating rate of downstream silicon plants remains low. Secondly, steel mills are also in a weak position due to the shrinking profit margins of steel products. As a result, procurement only maintains small-order rigid demand, and there is a strong sentiment to drive down prices. In the short term, the electrode market will remain in the doldrums. During the week, the quoted price of ordinary power carbon electrodes with a diameter of 960-1100mm was 6,200-6,400 yuan/mt, down 300 yuan/mt week-on-week. The quoted price of ordinary power graphite electrodes with a diameter of 960-1100mm was 9,600-9,800 yuan/mt, down 300 yuan/mt week-on-week.

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