Silicon metal quotes stabilize and show signs of rising, with news of production cuts by major plants stimulating stronger futures [SMM Silicon Industry Weekly Review]

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SMM June 26th News: Silicon Metal:

This week, the main futures contract has been trading around 7,400-7,600 yuan/mt, with some suppliers raising their quotes to downstream users by about 100 yuan/mt WoW. Downstream aluminum alloy and other users mainly purchased as needed or digested inventories, and the spot transaction price remained stagnant. On Thursday, influenced by the news of production cuts at large plants in Xinjiang on the supply side, the main futures contract price rose by 2.66 percentage points in a single day, with the intraday high reaching 7,830 yuan/mt. Silicon enterprises also followed suit with price increases. Downstream purchasing was sluggish, with market observers mainly waiting and watching, and intraday transactions were relatively light. Today, SMM's oxygen-blown #553 silicon in east China is priced at 8,100-8,300 yuan/mt, up 50 yuan/mt WoW, while #441 silicon is priced at 8,400-8,600 yuan/mt, basically flat WoW.

On the demand side, the weekly production of polycrystalline silicon decreased slightly MoM. On the one hand, the commissioning of some new capacity was delayed, and on the other hand, the resumed production capacity had not yet yielded output. Based on the expectation of some polycrystalline silicon capacity resumptions, the demand for silicon metal from polycrystalline silicon in July is expected to increase MoM. The operating rate of silicone enterprises remained basically stable, with DMC weekly production remaining basically flat at around 49,000 mt WoW. DMC prices were at 10,300-10,600 yuan/mt, down 50 yuan/mt WoW. The operating rate of aluminum-silicon alloy enterprises decreased slightly MoM, mainly due to weak demand during the off-season and cost-side pressures.

In terms of inventory, according to supply-demand balance calculations, the industry's theoretical inventory is expected to increase from January to June 2025. However, from the perspective of reported inventory, i.e., social inventory, based on SMM's social inventory data and warrant data from the Guangzhou Futures Exchange, there has been continuous destocking in recent weeks, resulting in a decrease in reported inventory and an increase in unreported inventory.

On the supply side, the actual production cut time at large plants in Xinjiang has not been determined, and the recent supply-side performance has fallen short of expectations. On the demand side, the operating rate of polycrystalline silicon in July is expected to increase. The combination of reduced supply and increased demand provides support for short-term silicon prices. With industry inventory at high levels and overcapacity, sentiment within the industry remains relatively calm, and there is a strong market bargaining sentiment.

Polysilicon: This week, the N-type polysilicon price index was 34 yuan/kg, with N-type recharging polysilicon priced at 33-36 yuan/kg. Polysilicon prices remained stable overall. Market transactions this week were extremely limited, mostly being follow-up deliveries from transactions made last week. Currently, market sentiment remains bearish, with the polysilicon market focusing on July's production schedule. There are numerous "rumors" in the market, and the direction of capacity expansion by large plants is currently limited. July's production schedule still has a certain degree of uncertainty.

Wafer:This week, the price of N-type 183 wafers ranged from 0.85 to 0.88 yuan/piece, 210R wafers from 1.01 to 1.03 yuan/piece, and 210 wafers from 1.2 to 1.25 yuan/piece. Wafer prices continued to weaken, with some 183 wafer manufacturers lowering their prices to 0.85 yuan. Leading manufacturers began to quote prices at 0.88 yuan. The overall decline in 183 wafer prices was relatively large due to demand. In July, the production schedule of wafers was further affected by the decline in prices, leading to a further decrease in production economy. Multiple wafer enterprises planned to cut production.

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