Silicon Metal Market Remains Stagnant and Weak, Polysilicon Price Range Holds Steady [SMM Silicon Industry Weekly Review]

SMM Dec. 4: Silicon Metal: Spot silicon metal prices were in the doldrums this week. As of Dec. 4, SMM oxygen-blown #553 silicon in east China was at 9,400-9,500 yuan/mt, down 100 yuan/mt WoW; #441 silicon was at 9,600-9,700 yuan/mt, down 100 yuan/mt WoW; #421 silicon (used in silicone) was at 9,800-10,200 yuan/mt, flat WoW. In the futures market, the most-traded SI2601 contract fluctuated rangebound weakly around 8,900-9,200 yuan/mt this week, settling at 8,910 yuan/mt on Thursday afternoon, down 205 yuan/mt WoW. Trading side, buy order demand increased somewhat as futures fell to 8,950 yuan/mt, with mainstream transactions in the doldrums.

Demand side, the silicone operating rate edged down WoW, mainly due to production cuts at some monomer plants. Silicone enterprises intended to implement production cuts to hold prices firm in December, though the specific reduction magnitude remains unclear, with limited recent impact on silicon metal consumption. On the other hand, silicone DMC prices rose to around 13,400-13,700 yuan/mt, strengthening monomer plants' profitability. The polysilicon operating rate edged up WoW, supporting silicon metal consumption. The aluminum-silicon alloy operating rate was basically stable, with good year-end automotive consumption demand leading to solid downstream orders and maintaining high operating rates at aluminum alloy enterprises. Recent continuous aluminum price increases led to rapid cost growth for secondary aluminum enterprises, but the price increase for secondary aluminum-silicon alloy ingots lagged behind that of raw materials, maintaining strong sentiment to drive down prices for auxiliary material silicon metal.

Supply side, the silicon metal operating rate showed increases in the north and decreases in the south. South China saw further seasonal production cuts during the dry season in Sichuan and Yunnan silicon enterprises, while individual northern silicon enterprises increased or resumed production. Net, silicon metal supply in December is expected to be roughly stable MoM.

Based on supply-demand balance calculations, silicon metal supply showed inventory buildup in Q4. The theoretical industry inventory buildup narrowed in November compared to October. If no sudden disruptions occur on the supply side in December, the balance is expected to maintain inventory buildup expectations. Spot silicon metal prices have fluctuated rangebound for two months, with the stalemate unchanged; recent spot prices are expected to remain rangebound.

Polysilicon: The polysilicon price index was 51.99 yuan/kg this week. N-type recharging polysilicon was quoted at 49.6-55 yuan/kg, granular polysilicon at 49-51 yuan/kg. Overall polysilicon market transactions were limited, with rod-shaped polysilicon mainstream transactions around 51-53 yuan/kg and granular polysilicon at 49-50 yuan/kg. Prices remained largely stable, with frequent downstream price cuts, while polysilicon quotes were temporarily held firm by top-tier enterprises. November production reached approximately 114,600 mt, falling short of market expectations, and December output is expected to see only a slight decline.

Wafer:This week, overall wafer prices declined, with N-type 183 wafers priced at 1.1-1.2 yuan/piece, 210R wafers quoted at 1.15-1.25 yuan/piece, and 210mm wafers quoted at 1.45-1.55 yuan/piece. Wafer enterprises experienced consecutive price drops, with trading volume already thinning at higher price levels. The decline in wafer prices did not stem from disorderly competition, nor is it a problem unique to the wafer segment; the underlying cause remains weak order demand. Batteries have lowered their safety inventory levels, forcing wafer producers to cut production and reduce prices. According to statistics, wafer production cuts in December are projected to exceed 16% MoM, with output likely hitting a new low for the year. Rising prices of auxiliary materials such as silver, aluminum, and copper have put modules under pressure, and even price increases have made it difficult to offer better terms to battery makers. Therefore, to improve the current predicament, the only solution is for upstream players to redistribute profits.

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