Silicon Metal Futures Fluctuate within a Narrow Range, Spot Market Largely Stable [SMM Silicon Industry Weekly Review]

SMM, June 18: Silicon Metal: This week, spot silicon metal prices continued to move sideways, with limited room for both increases and declines, fluctuating within a narrow range, while the most-traded futures contract fluctuated in the doldrums within 8,550-8,850 yuan/mt. As of June 18, SMM east China oxygen-blown #553 silicon was at 9,100-9,200 yuan/mt, #441 silicon at 9,300-9,400 yuan/mt, and #421 silicon at 9,300-9,500 yuan/mt. Silicon enterprises still largely held their quotes firm. Downstream buyers and traders remained cautious in purchasing, with some users digesting previous low-priced inventories. Outside China clients held price expectations below current levels, and new order transactions in the market were sluggish. Some users expected futures-listed point prices around 8,400-8,500 yuan/mt.

On the demand side, polysilicon operating rates were largely stable. Affected by sluggish polysilicon spot prices, some polysilicon enterprises had production cut plans recently, while there were both increases and decreases in output. From June to August, the polysilicon operating rate trend maintained an upward trajectory, but the total production schedule increase may fall short of expectations. Silicone enterprise operating rates stayed weak, with DMC prices under pressure. Monomer plants planned to cut production to hold prices firm. As some monomer plants cut production, suspended operations, or reduced loads, the silicone industry's operating rate was mainly weak recently. Aluminum alloy enterprise operating rates fluctuated slightly, with some secondary aluminum alloy enterprises dragged down by tight aluminum scrap and weakening demand at certain stages.

On the supply side, higher operating rates at Sichuan and Yunnan silicon enterprises during the rainy season were already expected, and there were few new variables in the market. As supply and demand variables were relatively deterministic in the short term, market sentiment remained rational amid the buying-selling game. The price center of silicon metal is expected to remain at the low end of the range recently.

Polysilicon: This week, the polysilicon price index was 32.73 yuan/kg, with N-type recharging polysilicon quoted at 32-34 yuan/kg, and granular polysilicon quoted at 32-33 yuan/kg. Overall prices continued to be in the doldrums. Two top-tier players negotiated a large order, and the market awaited their contract price, while downstream enterprises still pushed for lower prices. Subsequently, bases in Inner Mongolia, Sichuan and other regions had incremental room, triggering supply pressure. However, it should be noted that as prices fell, some bases planned additional production cuts, though Q3 still faced overall oversupply pressure. Meanwhile, monitoring of follow-up policy developments is warranted.

Wafers: This week, wafer prices were generally stable, with N-type 183mm wafers at 0.86-0.9 yuan/piece, 210R wafers quoted at 0.96-1.00 yuan/piece, and 210mm wafers quoted at 1.16-1.2 yuan/piece. This week, second- and third-tier wafer enterprises gradually lowered prices, while top-tier players continued to hold prices firm. Battery manufacturers had further demands, and the tug-of-war between upstream and downstream intensified at this critical period. As the 183 battery approached cash cost, the large-size premium narrowed, and the pressure to cut off profits in the wafer segment increased. However, at the same time, we found that the upstream production ramp-up pace fell short of expectations, wafer production also showed a trend of production cuts from June to July, and the overall market is returning to "produce based on sales." Therefore, we believe that the possibility of wild swings in wafer prices is relatively small in the short term.

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