Severe weather overseas affects supply side: Recent quartz sand price analysis [SMM Analysis]

Recently, several states in the eastern United States, including North Carolina, were hit by Hurricane Helene. As of now, the hurricane has resulted in nearly 200 deaths and over 600 missing, with most areas experiencing water and power outages. China's main source of high-purity quartz sand for photovoltaic crucibles comes from the Spruce Pine mine in North Carolina. The companies Sibelco and The Quartz Corp, which are major suppliers of high-purity quartz sand to China, have suspended production due to the hurricane. After the hurricane passed, the area experienced severe flooding, blocking transportation routes and causing partial damage to production facilities. Supply is expected to decrease in the short term.

SMM has learned that the severe weather has caused a temporary halt in production. Currently, Sibelco and The Quartz Corp are working on restarting production lines post-disaster, with some facilities expected to resume production soon. However, transportation has not yet fully recovered, and the full production-sales-transportation process is expected to resume in mid to late October. Regarding the supply side, The Quartz Corp has indicated that there is still sufficient semi-finished ore in Norway, and customers with urgent needs can be prioritized, with limited impact from the disaster.

Recently, the price center of domestic high-purity quartz sand has slightly declined. With the recent decrease in crucible prices, crucible companies have shown increased resistance to quotes from sand companies. Under intensified cost pressure, they have paused purchases from sand companies. Additionally, crucible companies are continuously pressing down on the price of imported sand. At the beginning of the year, some long-term contract prices were around 175,000 yuan/mt, while the current psychological prices of crucible companies are at 110,000-120,000 yuan/mt. The main reason for this strong intention to drive a hard bargain is the significant weakening of crucible demand, with procurement from PV wafer remaining primarily on a just-needed basis. Although crucible companies previously reduced their load significantly, the current supply remains in surplus, leading to high inventory pressure.

SMM believes that quartz sand prices will decrease in the near term, mainly for medium and inner layer sand, with imported sand prices also expected to fall. Although the supply pace of imported sand will slow, demand pressure is significant, and the results of the new round of negotiations are expected to show a decline.