Silicon metal prices fall below expectations, silicon enterprises show weak willingness to sell [SMM Silicon Industry Weekly Review]

SMM Dec. 11: Silicon Metal: The price center of silicon metal was weak this week, with differentiated sales performance among suppliers. As of Dec. 11, SMM oxygen-blown #553 silicon in east China was at 9,100-9,300 yuan/mt, down 250 yuan/mt WoW; #441 silicon was at 9,300-9,500 yuan/mt, down 250 yuan/mt WoW; #421 silicon (used in silicone) was at 9,800-10,200 yuan/mt, flat WoW. Since last Friday, silicon metal futures prices fell, with the SI2601 contract closing at 8,285 yuan/mt on Dec. 11, down 625 yuan/mt, or 7%, WoW from last Thursday. After the futures decline, trading volume from traders and downstream buyers increased significantly, spot-futures arbitrage suppliers sold smoothly, and the spot-futures price spread strengthened by about 50-100 yuan/mt; calculated as absolute prices, prices weakened noticeably WoW. Most silicon enterprises adopted a wait-and-see approach, either suspending quotes or maintaining original prices. On one hand, recent smelting raw material prices remained stable, including silicon coal prices which were also stable compared to earlier periods; with silicon prices falling, enterprises faced losses and had poor willingness to sell. On the other hand, most northern silicon enterprises had low inventory pressure and no urgent need to sell, resulting in strong sentiment to hold prices firm overall.

On the demand side, polysilicon operating rates were basically stable this week, with some silicon powder order tenders during the week; focus on the transaction prices of powder orders. Silicone operating capacity declined slightly this week, with limited impact. Downstream silicone enterprise operating rates were largely stable. Aluminum-silicon alloy enterprise operating rates fell slightly WoW; a Chongqing secondary aluminum-silicon alloy plant cut production due to weather pollution, affecting this week's operating rate, while primary aluminum-silicon alloy enterprise operating rates were largely stable.

On the supply side, silicon enterprise production saw both increases and decreases this week, remaining basically stable overall. In winter, air pollution is frequent in the north; Xinjiang, as a major supply region, has changes in operating rates that significantly impact the supply-demand structure. Attention should be paid to the impact of changes in Xinjiang silicon enterprise operating rates on the supply side. Potential positives remain on the supply side, coupled with the limited number of existing silicon metal warrants, stable demand, suggesting the possibility of a rebound and correction after silicon prices hit bottom.

Polysilicon: The polysilicon price index was 51.99 yuan/kg this week, with N-type recharging polysilicon quoted at 49.6-55 yuan/kg and granular polysilicon at 49-51 yuan/kg. Suspected industry-related companies were established this week, slightly boosting market sentiment and increasing market confidence in industry self-discipline. Short-term trading in the spot market did not change significantly—the overall trading atmosphere remained slightly sluggish. Some downstream segments began to stop falling due to costs and other factors, but weak downstream demand until the Chinese New Year and cost pressures are expected to remain major obstacles to a polysilicon market rebound.

Wafer: Overall wafer prices fell and then rose this week, with N-type 183 wafer prices at 1.15-1.2 yuan/piece, 210R wafer offers at 1.2-1.25 yuan/piece, and 210mm wafer offers at 1.45-1.5 yuan/piece. Notably, the high price of 210R is still subject to back-and-forth negotiations between upstream and downstream. Given the current situation, it is less likely that battery enterprises will expand losses and accept wafer price increases. The main reason for recent price fluctuations is upstream sentiment, while the reality and expectations of weakening demand have not changed. Going forward, close attention should be paid to the results of the association's self-discipline 2.0 meeting and the actual degree of compliance by enterprises.

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