Silicon Metal Prices Continue to Fluctuate and Consolidate [SMM Silicon Industry Weekly Review]

SMM Nov. 6: Silicon Metal: Spot silicon metal prices were largely stable this week. As of Nov. 6, SMM oxygen-blown #553 silicon in east China was at 9,400-9,500 yuan/mt, flat WoW; #441 silicon was at 9,600-9,700 yuan/mt, flat WoW; #421 silicon (used in silicone) was at 9,800-10,200 yuan/mt, flat WoW. The futures market saw significant volatility, falling then rising during the week. The most-traded SI2601 contract hit a weekly low of 8,835 yuan/mt and a high of 9,175 yuan/mt, closing at 9,065 yuan/mt on Thursday, down 90 yuan/mt WoW. From suppliers' quotes, some silicon enterprises initially offered lower prices than trading firms engaging in both spot and futures markets. After a brief dip in futures this week, trading volume from market orders increased, but the spot-futures price spread remained weak due to buyer price pressure. On Thursday, futures prices strengthened, driven by sentiment in coking coal and other markets, with the most-traded contract rebounding above 9,000 yuan/mt.

Demand side, polysilicon enterprise operating rates dropped WoW, an expected adjustment ahead of the dry season in southwest China. Silicone operating rates were basically stable, supporting steady silicon metal demand. Alloy enterprises' operating rates also saw limited change, purchasing silicon metal as needed. Overall, recent supply-demand changes in silicon metal were within market expectations, and prices moved sideways. Regarding future price views, a tug-of-war between longs and shorts persists. Without new expectations emerging, recent silicon metal price changes remain limited. Market focus includes policy changes affecting polysilicon enterprise operations on the demand side and potential environmental protection requirements impacting supply in northern China.

Polysilicon: The polysilicon price index was 52 yuan/kg this week. N-type recharging polysilicon was quoted at 49.4-55 yuan/kg, granular polysilicon at 50-51 yuan/kg. Polysilicon prices were largely stable, but the trading center shifted lower. There was no further news on the polysilicon platform establishment this week. Downstream prices continued to weaken, coupled with some polysilicon manufacturers selling, leading to a lower price center. However, with frequent market meetings, focus remains on capacity exit and platform implementation.

Wafer: Overall wafer prices dropped slightly this week. N-type 183mm wafers were priced at 1.3-1.33 yuan/piece, 210R wafers at 1.33-1.35 yuan/piece, and 210mm wafers at 1.68-1.7 yuan/piece. The price decline resulted from weak demand and a deteriorating wafer supply-demand balance. Overseas demand for batteries weakened, impacting 183mm size adjustments. Although domestic new installations improved marginally, they remained low, leading to overall weaker demand. On the other hand, the phenomenon of battery plants excessively outsourcing polysilicon processing severely infringes upon the interests of wafer enterprises. Small wafer manufacturers, under pressure, are forced to utilize toll processing to circulate cash, indirectly leading to a deterioration in the wafer market structure. This causes wafer prices to lose support even when inventory levels are reasonable. Looking ahead, the wafer market is expected to shift toward a cost-based pricing logic, with limited room for further declines.

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