Tug-of-War between Longs and Shorts Intensifies, Silicon Metal Price Fluctuation Range Widens [SMM Silicon Industry Weekly Review]

SMM, July 9: Silicon Metal: This week, silicon metal futures prices accelerated their decline before rebounding slightly. The most-traded contract saw significant changes in open interest, with open interest increasing by 67,000 lots and then decreasing by 30,000 lots. The tug-of-war between longs and shorts intensified, and silicon metal’s fluctuations widened. As of July 9, SMM’s oxygen-blown #553 silicon in east China stood at 8,900-9,100 yuan/mt, down 100 yuan/mt WoW, while #441 silicon was at 9,100-9,300 yuan/mt, down 50 yuan/mt WoW. In the futures market, the most-traded contract hit a low of 8,025 yuan/mt on Thursday. Some bears locked in profits by closing positions, coupled with supply-side news disturbances, and the contract closed up at 8,340 yuan/mt by the end of the day. The overall price center weakened WoW. In terms of quotations and transactions, silicon enterprises maintained stable quotes. Under profit losses, they held prices firm with a strong sentiment, showing little willingness to sell at discounted prices. Spot-futures traders performed well in shipments and transactions, while traders and downstream users bought the dip to restock. Shipments were smooth, and the spot-futures price spread strengthened by 50-100 yuan/mt.

Demand side, polysilicon’s weekly operating rate remained basically flat WoW. From July to August, polysilicon’s demand for silicon metal maintained an increasing trend. Silicone enterprises’ weekly operating rate edged down slightly WoW, with the decline expected at around 2%. Attention still needs to be paid to changes in silicone enterprises’ operating rate. The aluminum alloy industry’s operating rate remained broadly stable WoW. Secondary aluminum alloy enterprises face persistent short-term pressure from raw material aluminum scrap supply securing, and combined with the traditional off-season, operating rates recently held steady or edged down slightly.

Silicon metal futures prices dipped and broke below cost support during the week, boosting the tug-of-war fervor in the market. Silicon enterprises in Sichuan and Yunnan with production resumption plans have largely completed restarts. Supply disturbances in the north had limited impact on total production expectations. The industry fundamentals have yet to show a directional turning point. Downward cost support is clear, limiting the room for price declines; however, the supply-demand easing pattern hasn’t changed, and upward price movements lack fundamental drivers.

Polysilicon: This week, the polysilicon price index stood at 31.82 yuan/kg, with N-type recharging polysilicon quoted at 31-33 yuan/kg and granular polysilicon at 31-32 yuan/kg. Prices overall remained in the doldrums this week. Early in the week, overall transactions were weak, with some prices continuing to decline, and individual producers faced significant shipment pressure. Later, prices gradually stabilized due to cost support. This week saw frequent news of energy consumption surveys, and relevant authorities also collected data on energy consumption, capacity, and production from enterprises. Market expectations for related policies are gradually strengthening.

Wafer:This week, wafer prices declined, with N-type 183 wafers priced at 0.85-0.87 yuan/piece, 210R wafer quotations at 0.96-0.97 yuan/piece, and 210mm wafer quotations at 1.16-1.18 yuan/piece. This week, the high-end prices of the ranges for 183 and 210R were lowered, while 210N remained unchanged, and top-tier players reduced their offers to facilitate transactions. The main reason for the wafer price decline this week was battery losses and production cuts. Driven by the dual factors of silver and battery supply-demand dynamics, battery prices dipped below cash cost, and multiple battery enterprises explicitly planned production cuts, causing a reversal in the supply-demand relationship of wafers this month, with prices subsequently losing support. Additionally, polysilicon prices edged down, also impacting wafers somewhat. Going forward, wafer prices are still expected to face downside risk, but the overall magnitude will be manageable.

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