The silicon coal market, a raw material for silicon metal, is in the doldrums, while the petroleum coke market shows moderate performance [SMM Weekly Review of Silicon Metal Raw Materials]

Silica: The silica market remained in the doldrums this week. In terms of supply, the overall supply was relatively loose, and mine-mouth inventories were under pressure. To reduce inventory pressure, some individual mines in certain regions have reduced production. In terms of demand, overall procurement remained limited to small-scale, rigid demand, and downstream enterprises had a strong sentiment to drive down prices, continuously compressing the bargaining space for silica manufacturers. Currently, the mine-mouth ex-factory prices of high-grade silica in Inner Mongolia range from 310 to 350 yuan/mt. In Jiangxi, the mine-mouth ex-factory prices of high-grade silica range from 380 to 420 yuan/mt, while those of low-grade silica range from 310 to 330 yuan/mt.

Silicon coal: The silicon coal market operated in the doldrums this week. In terms of prices, on one hand, it was mainly supported by the stable spot prices of coking coal, and on the other hand, because the current quotes for silicon coal in various regions were already close to the cost line, manufacturers had limited room for concessions, so the overall market tended to be weak and stable. In terms of demand, the operating rate of silicon plants remained low, and overall demand was still weak, with procurement only maintaining small-scale, rigid demand for restocking. In terms of supply, as one of the by-products of coking coal, silicon coal accounted for a relatively low proportion for coal plants. Production was mainly scheduled based on order quantities, with no inventory pressure and limited supply elasticity. Looking ahead at market trends, if coking coal futures continue to perform well, it will boost expectations for a rise in coking coal spot prices, thereby further driving up expectations for silicon coal prices. Currently, the average price of silicon mixed coal in Gansu is 840 yuan/mt, and the average price of granular coal is 960 yuan/mt. In Ningxia, the average price of silicon mixed coal is 900 yuan/mt, and the price of granular coal is 1,140 yuan/mt. In Xinjiang, the average price of non-caking silicon coal is 710 yuan/mt, and the price of caking silicon coal is 1,250 yuan/mt.

Petroleum coke: The petroleum coke market performed moderately this week, with downstream enterprises showing increased enthusiasm for procurement, especially for medium and low-sulphur petroleum coke, which saw significant price increases. SMM data showed that the average price of petroleum coke from local refineries was reported at 2,319 yuan/mt, up 5.43% MoM. Transactions of Formosa Plastics petroleum coke were relatively mediocre during the week, with poor downstream purchases, and prices continued to weaken, currently ranging from 980 to 1,020 yuan/mt. Overall, downstream enterprises' restocking behavior effectively boosted market sentiment, significantly increasing trading activity. SMM expects petroleum coke prices to maintain a mild upward trend next week.

Electrodes: The electrode market remained in a weak state this week, with an overall lack of vitality. On the cost side, the price of petroleum coke, a key raw material for electrode production, increased significantly this week, triggering a chain reaction in the market. The price of low-sulphur petroleum coke also followed suit, strengthening the marginal cost support for electrodes. However, the impact of this cost increase has not yet been directly transmitted to electrode prices. There are still divergences regarding the price trend transmitted to electrodes: from a cost perspective, the increase in raw material prices will drive up electrode prices passively; from a demand perspective, current downstream purchases remain limited to rigid demand, with insufficient order growth. Coupled with high electrode enterprise inventories, the market lacks substantive demand support, and there is significant resistance to price increases. Therefore, in the short term, given the situation where cost increases are met with demand constraints, electrode prices will be caught in a tug-of-war between "cost increase expectations" and "weak demand reality." Currently, the quoted prices for ordinary power carbon electrodes with diameters of 960-1100mm are 6,100-6,300 yuan/mt, while those with diameters of 1,272mm are 6,800-7,000 yuan/mt. For ordinary power graphite electrodes with diameters of 960-1100mm, the quoted prices are 9,300-9,500 yuan/mt, and those with diameters of 1,272mm are 10,900-11,100 yuan/mt.

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