Silicon Metal Market in Stalemate with Prices Consolidating at Lows [SMM Silicon Industry Weekly Review]

SMM, July 2: Silicon metal: This week, spot silicon metal prices were in the doldrums, with the transaction center edging lower. As of July 2, SMM east China oxygen-blown #553 silicon stood at 9,000-9,200 yuan/mt, flat WoW; #441 silicon at 9,200-9,300 yuan/mt, down 50 yuan/mt WoW; #421 silicon at 9,300-9,500 yuan/mt, flat WoW; and #3303 silicon at 10,100-10,200 yuan/mt, down 50 yuan/mt WoW. On the futures market, the most-traded SI2609 silicon metal contract drifted lower, hitting a weekly low of 8,310 yuan/mt, with a mainstream range of 8,350-8,400 yuan/mt. In terms of quotes and deals, silicon enterprises showed weak willingness to sell at reduced prices; mid-stream trading firms engaging in both spot and futures markets shipped relatively smoothly thanks to a wider spot-futures price spread as futures fell, while downstream buyers purchased at low prices as needed.

Demand side, weekly production of polysilicon enterprises increased WoW, and silicon metal consumption from the polysilicon sector in July is expected to increase by approximately 6% MoM. Currently, the share of polysilicon supporting or silicon lump toll processing has risen, and externally purchased silicon powder orders have declined significantly compared with previous years. The weekly operating rate of silicone enterprises was basically stable. Silicone consumption of silicon metal was weak in early July, but it is expected to improve in late July, given expectations of operating rate adjustments at silicone monomer enterprises. The operating rate of aluminum-silicon alloy enterprises was weak but stable. Given the traditional off-season, new orders were limited, and combined with the impact of insufficient tax invoices, there lacked upward momentum for operating rates, which remained weak and stable recently.

Supply side, silicon metal production in June reached 358,400 mt, up 8% MoM. In July, production ramp-up in Sichuan and Yunnan will be the main driver of supply growth, with July output expected to increase by 9% MoM. The fundamental logic of both supply and demand increasing while supply pressure remains high remains unchanged. In the absence of news disturbances from policy or macro-fund aspects and without unexpected events, silicon metal prices will continue to consolidate at lows.

Polysilicon: This week, the polysilicon price index was 32.21 yuan/kg, with N-type recharging polysilicon quoted at 31.3-33.5 yuan/kg and granular polysilicon at 32-33 yuan/kg. Overall, prices continued to be in the doldrums. Overall market trading was sluggish, with low volumes. Downstream held ample inventories and showed limited purchasing enthusiasm, only buying small quantities at low prices. Polysilicon production in June came in below expectations, at only 92,700 mt. In July, driven mainly by continued production ramp-up in south-west China, output is expected to increase by about 6-7%.

Wafer: This week, wafer prices were generally stable, with N-type 183 wafers at 0.85-0.88 yuan/piece, 210R wafers quoted at 0.96-0.98 yuan/piece, and 210mm wafers at 1.16-1.18 yuan/piece. This week, wafers experienced a phase of stabilization under the shift in supply-demand pattern. In July, the wafer segment shifted from inventory buildup to destocking, easing pressure on the segment. Additionally, the reduced proportion of wafer exports and decreased toll processing orders both supported wafer prices. Subsequently, it is expected that battery price cuts will not drive wafer prices; rather, raw material costs are closely tied to wafer prices.

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