Decline in silicon metal prices narrows, market trading atmosphere remains moderate [SMM Silicon Industry Weekly Review]

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SMM News on June 5: Silicon Metal:

The market price of silicon metal continued to consolidate at a weak level, with the decline significantly narrowing compared to the previous period. In the futures market, the main silicon metal contract fluctuated considerably during the week. The highest point of the Si2507 contract was 7,330 yuan/mt, and the lowest point was 6,990 yuan/mt. On June 5, the main contract closed at 7,135 yuan/mt, down 80 yuan/mt or 1% WoW, with the decline narrowing. In the spot market, SMM's oxygen-blown #553 silicon in east China was priced at 8,000-8,300 yuan/mt, down 300 yuan/mt WoW, while #441 silicon was priced at 8,400-8,600 yuan/mt, also down 300 yuan/mt WoW. After the futures market declined, some silicon suppliers gradually followed suit with lower quotes, but most producers, facing significant losses, could not suspend quoting. On Wednesday, the futures market rebounded by nearly 3%, but the market sentiment in the silicon market remained flat, with downstream users showing little inclination to "rush to buy amid continuous price rise" and restock.

In terms of warrants, silicon metal warrants have been continuously decreasing since early May. According to GFEX data, as of June 5, there were 61,309 lots of silicon metal warrants, a decrease of 1,944 lots (9,720 mt) from May 30 and 7,927 lots (39,635 mt) from April 30.

On the demand side, the operating rate of polysilicon increased slightly. SMM's polysilicon production in May was 96,100 mt. Recently, individual polysilicon enterprises may have plans to increase production, so attention should be paid to subsequent changes in the operating rates of polysilicon enterprises. During the week, some polysilicon plants in north-west China conducted tenders for silicon powder orders, but the actual transaction prices have not yet been determined. The operating rate of silicone enterprises fluctuated slightly during the week. SMM's silicone DMC production in May was 184,000 mt. Production resumptions of monomer capacity undergoing maintenance in June are expected to increase DMC production by approximately 10% MoM in June. The demand for silicon metal from the silicone sector showed an increase. The operating rate of aluminum alloy enterprises remained basically stable, with purchasing as needed for silicon metal.

In June, both supply and demand for silicon metal are expected to increase. Based on the current production schedule, the supply-demand balance in June is expected to be basically flat. With the long-term low-level operation of silicon metal prices, industry inventory is expected to show a decrease in social inventory and an increase in in-plant inventory. The liquidity of spot silicon metal of certain specifications has declined compared to the previous period. The buyer's market situation for silicon metal remains unchanged, with spot prices of silicon metal continuing to consolidate at lows.

Polysilicon: This week, the price index of N-type polysilicon was 35.21 yuan/kg. N-type recharging polysilicon was priced at 35-38 yuan/kg, and N-type mixed polysilicon was priced at 31-36 yuan/kg. Overall, polysilicon prices were largely stable, with several transactions occurring before the holiday. Small plants achieved transactions at 32 yuan/kg before the holiday, while some high-quality mixed polysilicon from large plants achieved transactions at 35 yuan/kg. The most-traded enterprises mostly maintained agreed quotes of 36-37 yuan/kg for dense and recycled polysilicon. Market transactions were weak after the holiday. The resumption of production at a domestic base this week attracted market attention, with prices remaining stable for the time being. Market participants are closely monitoring the subsequent supply situation and the latest transaction status of wafers.

Wafer: This week, the price of N-type 183 wafers was 0.93-0.95 yuan/piece, the price of 210R wafers was 1.05-1.1 yuan/piece, and the price of 210 wafers was 1.25-1.3 yuan/piece. Wafer prices remained stable for the time being. Market transactions were limited before the holiday, but are expected to gradually pick up after the holiday, with the market focusing on the final actual transaction levels. Domestic wafer production schedules in June are expected to decline by approximately 2 GW MoM.

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