The spot silicon metal price is expected to fluctuate sideways as upstream and downstream will continue to be in a stalemate

This week, the price gap between spot and futures prices of silicon metal continued to widen. As of May 30, the price of above-standard #553 silicon metal in East China was 13,000-13,200 yuan/mt (flat WoW), versus 13,300-13,500 yuan/mt (flat WoW) for #441 silicon metal, 13,500-13,700 yuan/mt (flat WoW) for #421 silicon metal, and 13,900-14,100 yuan/mt (flat WoW) for #3303 silicon metal. Over the past two weeks, the most-traded silicon metal contract has climbed to new highs, with SI2409 reaching a peak of 13,325 yuan/mt this Thursday, rising by nearly 1,300 yuan/mt from low levels last week. Supply side, silicon companies raised offers amid active sentiment, while the quotations from large silicon metal plants in Xinjiang held stable at the lowest level in the industry. Demand side, market transactions were quiet amid high silicon metal futures prices and firm offers from silicon enterprises. Most orders were placed with large silicon metal plants in Xinjiang. Therefore, spot purchase prices for downstream users stabilised and did not follow the rise in futures prices.

The fundamentals indicated an increase in supply and a decreased in demand, resulting in a bearish price that contradicts the recent strong futures price trend. Recently, significantly influenced by market sentiment, the warrant liquidity was greatly restricted amid high futures prices, making the shipment intentions and prices of leading enterprises crucial for the short-term spot price trend. In the short term, as upstream and downstream will continue to be in a stalemate, the spot price is expected to see small fluctuations.