More Outflows Than Inflows: Silicon Metal Social Inventory Continues to Decline [SMM Silicon Inventory]

[Silicon Metal Production Cuts Improve Market Sentiment, Futures Trend Narrowly Stronger]: This week, spot silicon metal prices held steady, while futures prices trended stronger. This week, silicon metal futures prices drifted higher. On Thursday, the SI2609 contract closed at 8,425 yuan/mt, up 255 yuan/mt from last Friday. In the spot market, SMM east China oxygen-blown #553 silicon was at 9,000-9,100 yuan/mt, flat WoW, and #441 silicon was at 9,200-9,300 yuan/mt, also flat WoW. During the week, futures prices stopped falling, stabilized, and rebounded. On one hand, production cuts on the silicon metal supply side expanded. Following some capacity reductions at the end of July, new production cut information emerged this week in regions such as Gansu and Ningxia. Silicon metal production in August is expected to drop 9% MoM, and total silicon consumption on the demand side is expected to increase MoM. The fundamentals of reduced supply and increased demand showed significant improvement, and market sentiment warmed, with more bullish views emerging. On the other hand, influenced by downstream PV anti-involution policies, the market trading atmosphere was bullish.

[SMM Express] Samchrome FZE, the Dubai-based exclusive distributor of Samancor Chrome's ferrochrome and chrome ore products, has confirmed 156 US cents per pound as the reference for the European Benchmark Ferrochrome Price for the third quarter of 2026. The figure sets the negotiated quarterly price point that European and international stainless steel producers use as their contractual reference for South African-origin ferrochrome supplied through Samancor's distribution network, distinct from the spot and tender-based pricing that governs China's domestic ferrochrome market. The confirmation offers a useful international counterpoint to the pricing trend SMM has tracked on the Chinese side of the market through mid-2026. China's domestic high-carbon ferrochrome price had climbed from around CNY 8,200 to roughly CNY 8,750-8,800 per 50 base mt between January and late March, before easing back to approximately CNY 8,190-8,290 by the end of June, with further softening and a bearish tender outlook noted into July. Whether the European quarterly benchmark holds steady, rises, or is adjusted downward relative to Q2 2026 will be an important signal for whether South African ferrochrome producers are seeing firmer support in negotiated Western contracts even as Chinese spot pricing cools — a comparison SMM will continue to track as more of the international benchmark data becomes available.

[Weekly Review on Aluminum Scrap and Secondary Aluminum: ADC12 Price Moves Sideways at High Levels as Cost Support Overlaps with Demand Constraints] This week, China’s aluminum scrap market prices were relatively stable, and the price difference between A00 aluminum and aluminum scrap widened again against the backdrop of aluminum scrap struggling to catch up. On the price side, driven by macro and capital sentiment, primary aluminum prices continued to rise. As of August 6, SMM A00 aluminum price closed at 23,800 yuan/mt, significantly up by 170 yuan/mt compared to last Thursday, while aluminum scrap raw material prices showed limited fluctuations overall.