Capital-Driven Silicon Metal Prices Trended Stronger After the Holiday with Spot Price Center Shifting Upward [SMM Silicon Industry Weekly Review]

SMM News, May 7:Silicon metal:After the Labour Day holiday, the silicon metal market trended stronger, with the most-traded futures contract breaking through resistance levels to rise above 9,000 yuan/mt. As of the morning of May 7, SMM east China oxygen-blown #553 silicon was at 9,200-9,300 yuan/mt, up 150 yuan/mt WoW; #441 silicon was at 9,300-9,500 yuan/mt, up 100 yuan/mt WoW; #3303 silicon was at 10,100-10,300 yuan/mt, flat WoW. After the holiday, futures prices remained strong, and silicon suppliers raised spot offer prices multiple times in small incremental probes, with east China #553 silicon offers rising above 9,300 yuan/mt. On the futures market, the SI2609 contract closed at 9,080 yuan/mt on Thursday, up 285 yuan/mt WoW, with an intraday high touching 9,180 yuan/mt. Low-priced sources in the silicon metal market decreased or disappeared, and the transaction center shifted notably higher compared to pre-holiday levels as just-in-time procurement provided support. This round of futures strength was mainly driven by macro and capital momentum, with no substantive positive support from the industry level for now. From late April to early May, silicon enterprises increased hedging at higher prices in batches and basis selling, with ownership gradually shifting to futures-spot traders. After futures were pushed higher, spot liquidity issues tended to emerge more easily. With futures remaining at elevated levels, although fundamentals were weak, rigid demand provided support, and spot prices followed higher passively.

Demand side, polysilicon enterprises' weekly production edged up slightly, with May polysilicon production schedule estimated at around 89,500 mt, up 3% MoM, keeping silicon metal consumption stable to slightly higher. Silicone enterprises' weekly operating rate edged up slightly WoW, mainly due to production resumptions at individual monomer plants in Jiangsu. Silicon metal consumption from silicone sector in May is expected to edge up MoM. This Saturday, silicone monomer enterprises will hold an industry meeting, covering the continuation of earlier production control and price-firming topics, as well as quality improvement and efficiency enhancement. Aluminum-silicon alloy enterprises' weekly operating rate declined slightly WoW. Primary aluminum alloy operating rates remained largely stable, while secondary aluminum alloy enterprises saw operating rates weaken slightly due to the demand off-season and cost pressure. Among them, the weekly operating rate of leading enterprises in the secondary aluminum industry fell 0.7 percentage points WoW to 57.0%.

Futures rose beyond expectations, breaking through 9,100 yuan/mt. From an industry perspective, the certainty of increased silicon metal supply in June is relatively strong, which will weigh on the sustainability of subsequent price increases. This round of price rise alleviated factory pressure to some extent. The tug-of-war between longs and shorts intensified, and subsequent focus should be on capital logic shifts, changes in macro sentiment, and the production pace on the industry side.

Polysilicon:This week, the polysilicon price index was 35.08 yuan/kg. N-type recharging polysilicon was quoted at 34-36.3 yuan/kg, and granular polysilicon was quoted at 34-36 yuan/kg. Polysilicon prices remained stable overall this week, with extremely limited market changes. Few orders were signed around the holiday, with most being subsequent shipments of old orders. Currently, there are still expectations for further industry meetings to be held, but the outcome of cost-oriented results remains unknown. The market exhibited an obvious wait-and-see sentiment, and the spot market showed no fluctuations for the time being.

Wafer:Wafer price ranges remained stable this week. Specifically, N-type 183 wafer prices were at 0.9-0.93 yuan/piece, 210R wafer quotes were at 1-1.03 yuan/piece, and 210mm wafer quotes were at 1.2-1.23 yuan/piece. As of now, the 0.02 yuan/piece price increase for 210R and 210 wafers is still in a negotiation process. With weakening end-use demand expectations in and outside China, battery price increases have been hindered. Given that all upstream segments are operating near cash cost levels, wafer enterprises have limited bargaining power. In addition, many 183 production lines have recently begun switching to 210R. 18X wafers are gradually shifting toward customized products, while 210R, as the mainstream market product, has already reached the breakeven line, with only enterprises that have good control over non-silicon costs able to maintain cash cost levels.

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