Market sentiment is positive, and spot silicon metal prices remain firm [SMM Silicon Industry Weekly Review]

SMM reported on July 10: Silicon Metal:

This week, spot and futures prices continued to hold up well. In the futures market, the main silicon metal contract rose to a maximum of 8,500 yuan/mt and a minimum of 8,045 yuan/mt during the week, with the futures market's price center moving up WoW. In the futures market, SMM's east China oxygen-blown #553 silicon metal was priced at 8,700-8,800 yuan/mt, up 50 yuan/mt WoW, while #441 silicon metal was priced at 9,000-9,100 yuan/mt, up 150 yuan/mt WoW. The increase in spot prices narrowed compared to the previous week. This round of spot price increases exceeded 600 yuan/mt. As silicon prices rose, downstream procurement attitudes diverged, with some users appropriately restocking to increase their inventory days, while others focused on digesting previous low-cost inventory and adopting a wait-and-see approach.

On the demand side, the operating rate of polysilicon enterprises was also basically stable. Recently, polysilicon enterprises have been continuously increasing their quotes, and subsequent attention will be paid to the follow-up of spot transaction prices. The production schedule expectations of polysilicon enterprises remain consistent with previous ones, with a slight increase in July compared to June. Recently, some silicon powder tender orders have been released, with the delivery-to-factory prices of 99# silicon powder hovering around 9,000-9,100 yuan/mt. The operating rate of silicone enterprises fluctuated slightly, with a slight MoM increase in weekly production. Recently, the overall operating rate has been largely stable. Silicone monomer enterprises have been procuring low-microelement #421 silicon metal at prices above 9,000 yuan/mt. The operating rate expectations of aluminum-silicon alloy enterprises are weak, mainly due to factors such as insufficient downstream orders and limited raw materials, resulting in weak demand for silicon metal.

In terms of inventory, as of July 10, the warrant volume of the Guangzhou Futures Exchange was 50,544 lots, equivalent to 252,700 mt, a decrease of 1,310 lots (6,600 mt) WoW. The SMM's social warehouse data in major regions was 551,000 mt, a decrease of 1,000 mt WoW. The inventory flow continued to shift from in-plant inventory to social inventory. Recently, the fluctuations in spot silicon metal prices have been closely related to futures prices, with many factors influencing futures market trends. Recently, both fundamentals and the macro environment have been favorable, and spot prices have remained firm.

Polysilicon: This week, the N-type polysilicon price index was 44.8 yuan/kg, with N-type polysilicon recharging polysilicon quoted at 43-49 yuan/kg and granular polysilicon quoted at 41-46 yuan/kg. Polysilicon quotes surged sharply, mainly due to industry self-discipline based on cost-based quote support. Currently, polysilicon enterprises have a strong mindset to stand firm on quotes amid this round of cost-based quotes. Cost depreciation is for full capacity, with limited immediate operating rates, leading to higher depreciation allocation. Overall quotes are relatively active. It should be noted that as of July 10, no new transactions had been signed in the market. In terms of supply and demand, there has been no significant change in the polysilicon production capacity utilization rate in July, and production is basically in line with expectations. SMM believes that some crystal pulling plants have limited inventory, and actual transactions may occur in the near future.

Wafer: This week, the price of N-type 183mm wafers is 1 yuan/piece, the quoted price of 210R wafers is 1.15 yuan/piece, and the quoted price of 210mm wafers is 1.35 yuan/piece. The wafer quotes have increased significantly this week, mainly due to the strong support provided by the rising market quotes of polysilicon. Currently, there have been no transactions in the market, and downstream players continue to monitor the actual transaction situation of polysilicon. In terms of production, the production schedule for July is expected to decrease by over 10% MoM, with no significant changes in enterprises.

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