Spot silicon metal prices edge up after the holiday; futures retreat after rapid rise; fundamentals still support silicon metal [SMM Silicon Industry Weekly Review]

SMM, October 15:Silicon metal:This week, the silicon metal market reopened after the holiday, with spot prices firming slightly. Futures prices rose first and then fell. As of October 15, SMM oxygen-blown #553 silicon in east China was at 9,450-9,550 yuan/mt, up 50 yuan/mt WoW. #441 silicon was at 9,500-9,700 yuan/mt, up 50 yuan/mt WoW. #3303 silicon was at 10,100-10,300 yuan/mt, flat WoW. In the futures market, the SI2611 contract retreated after a rapid rise this week. It opened at 8,505 yuan/mt on the first trading day after the holiday, then drifted higher amid bullish factors such as tight spot silicon metal circulation, the approaching rainy and dry seasons in Sichuan and Yunnan, and northern silicon enterprises holding prices firm. It hit a mid-week high of 8,750 yuan/mt, but then fell sharply under bearish macro disturbances, closing at 8,495 yuan/mt on Thursday, down 10 yuan/mt from the first post-holiday trading day (October 8). In terms of market quotes and transactions, silicon metal fundamentals remained firm after the holiday. On one hand, electricity costs held steady, while transportation costs for raw materials and products increased, raising overall factory costs. On the other hand, silicon metal supply growth was limited, and spot circulation of reasonably priced cargoes remained tight. Downstream users mainly drew down earlier inventories or made restocking purchases to meet immediate needs.

Demand side, polysilicon operating rates weakened MoM. In early October, some polysilicon enterprises gradually implemented production cut plans. Although a few polysilicon plants added capacity in October, overall polysilicon operating rates declined MoM in October. Silicone weekly operating rates were stable WoW, with silicone enterprises mainly delivering earlier orders while new order negotiations remained stagnant. Aluminum-silicon alloy weekly operating rates increased MoM. Secondary aluminum alloy operating rates have largely returned to pre-holiday levels, with the "September-October peak season" providing only a mild boost to silicon metal demand growth.

Overall, silicon metal fundamentals remain firm. September production fell sharply by 11% MoM, and newly resumed production capacity in October is minimal. Social inventory continues to destock. Combined with electricity, petroleum coke, silicon coal, and trucking costs staying high, tight spot circulation supports silicon metal prices. As some polysilicon production cuts were implemented in October, the theoretical silicon metal balance remains in destocking in October, but the destocking pace has narrowed significantly from September. The decline in polysilicon production is exerting marginal pressure on silicon metal demand. Coupled with weak macro sentiment, resistance above the futures market is emerging. In the short term, most silicon enterprises in Sichuan and Yunnan plan to cut production at month-end, meaning silicon metal will see large-scale reductions in November. Silicon metal supply is expected to continue declining, and firm fundamentals provide support to the downside.

Polysilicon: This week, the polysilicon price index stood at 41.46 yuan/kg, with N-type recharging polysilicon quoted at 40-43 yuan/kg and granular polysilicon at 40-41 yuan/kg. Market quotes edged up this week, mainly driven by earlier meetings and production cuts at some bases after the holiday. Polysilicon enterprises have raised their offers, but transactions have yet to materialize in volume, and downstream players still face inventory and cost concerns. Overall market liquidity remains weak.

Wafer: This week, wafer prices moved sideways overall. N-type 183 wafers were priced at 0.994-1.002 yuan/piece, 210R wafers at 1.031-1.05 yuan/piece, and 210mm wafers at 1.125-1.146 yuan/piece. Cost side, as upstream polysilicon production cuts are gradually implemented, polysilicon prices have risen, further strengthening wafer cost support and boosting enterprises' willingness to hold prices firm. Demand side, downstream restocking and ex-China phased stockpiling demand provide some support, but overall purchasing remains limited, leaving wafer prices with insufficient upward momentum. Wafer prices are expected to remain stable in the short term, with attention needed on polysilicon price trends and changes in downstream procurement.

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