[SMM analysis] Most active industrial silicon contract prices continued to fall

The industrial silicon market continued to be weak. The most active 2405 silicon contract continued to fall from around 13,200 yuan/ton to around 12,700 yuan/ton, with the low-end falling to 12,515 yuan/ton, a maximum drop of 5%. The spot price of industrial silicon, above-standard 553# silicon in east China, also fell from 14,500 yuan/ton to 14,200 yuan/ton, falling below the breakeven point of high-cost silicon companies in the north.

What are the fundamental data for industrial silicon? SMM estimates that the supply of industrial silicon in March will be 378,000 tons. The national silicon supply in March 2024 is expected to be 426,000 tons. On the demand side, with the increase in the operating rate of the downstream silicone industry and the ramp-up of new polysilicon production capacity, it is expected that the supply and demand structure of industrial silicon will be basically balanced in March. According to SMM data, the national social inventory of industrial silicon on March 15 totaled 363,000 tons. The inventory of general public warehouses was 105,000 tons, and the inventory of public delivery warehouses was 258,000 tons (including the part that has not been registered as warehouse receipts). Market transactions were quiet and a slow and cumulative increase in factory inventories occurred.

According to the purchasing progress of downstream users, although the recent spot price has dropped significantly compared with the previous period, the price of silicon powder has fallen even more sharply. The price of silicon lump has not yet reached the purchasing expectations of some users, and there has been no large-scale purchasing and stockpiling. If the upstream inventory pressure does not ease significantly, although there is support on the cost side, silicon spot prices are still likely to inch down.