Weak Market Sentiment Weighed on Both Silicon Metal and Polysilicon Prices [SMM Silicon Industry Weekly Review]

SMM News, March 19:Silicon metal:The silicon metal market moved lower this week after a stalemate, with weak market sentiment. Some downstream procurement demand was released, and transaction sentiment remained cautious. As of March 19, SMM east China oxygen-blown #553 silicon was at 9,000-9,200 yuan/mt, down 100 yuan/mt WoW; 441# silicon was at 9,300-9,500 yuan/mt, down 50 yuan/mt WoW; #421 silicon was at 9,500-9,700 yuan/mt, flat WoW; and 3303# silicon was at 10,200-10,400 yuan/mt, flat WoW. At the beginning of the week, silicon metal market prices were locked in a stalemate, while the most-traded contract fluctuated around 8,550-8,750 yuan/mt, with downstream purchases mainly sourced from factory cargoes. Subsequently, affected by macro factors and capital sentiment, futures prices fell continuously, closing at 8,285 yuan/mt on Thursday. Traders active in both futures and spot gained a price advantage and increased shipments, while downstream procurement sentiment diverged, and market transactions were concluded based on immediate needs.

Demand side, the polysilicon operating rate remained basically stable this week, and some polysilicon enterprises are expected to raise production in April, so the polysilicon operating rate is expected to increase slightly later. Some silicon powder tender orders were released during the week, and transaction prices for powder orders should be watched. The silicone operating rate was basically stable this week, and based on the production schedule, the operating rate of silicone monomer enterprises is expected to remain stable or edge down slightly. The aluminum alloy operating rate rose slightly while remaining stable this week, but downstream die-casting enterprises saw sluggish orders. Some aluminum alloy enterprises faced finished product inventory pressure, and procurement of silicon metal as a raw material was mainly driven by rigid demand.

Supply side, in mid-March, some small and medium-sized silicon enterprises adjusted operating rates up or down, while top-tier enterprises maintained stable operating rates, leaving the overall change limited. Demand side, the overall operating rate was largely stable, with no major changes in fundamentals, and supply and demand were basically balanced. On the cost side, there were no major adjustments for the time being. Spot silicon coal prices held steady, while Formosa Plastics petroleum coke prices rose by more than 100 yuan/mt. Industry inventory remained high, and with weak silicon metal demand, prices were more likely to fall than rise. Recently, futures prices were driven lower by capital sentiment. At present, the most-traded silicon metal contract has fallen to a relatively low level, silicon enterprises are struggling, and silicon metal prices continued to consolidate at lows with fluctuations.

Polysilicon:The polysilicon price index was 44.1 yuan/kg this week, with N-type recharging polysilicon quoted at 39.5-48 yuan/kg and granular polysilicon at 43-45 yuan/kg. Polysilicon prices continued to fall sharply this week, and bearish market sentiment gradually strengthened. News emerged this week that some producers may resume operations or raise output in April, while downstream price cuts and shipments by some top-tier enterprises added further pressure, prompting polysilicon enterprises to launch another round of price cuts. There was still some panic sentiment in the market, and downstream orders were limited from April to May, so price expectations were still relatively weak.

Wafer: Wafer prices edged down this week. N-type 183 wafer prices were at 0.98-1.03 yuan/piece, 210R wafer quotes were 1.1-1.13 yuan/piece, and 210 mm wafer quotes were 1.3-1.33 yuan/piece. Wafer prices declined again this week, mainly due to a supply-demand mismatch in the wafer segment amid a downward cycle in raw material costs. As of now, wafer selling prices had fallen to near cash cost. Logically, enterprises should cut production, but due to excessive external toll processing in March, producers were still competing for market share, thereby accelerating the downward cycle in raw material prices. In the short term, wafer prices may still struggle to stabilize. Going forward, it will depend on the price level at which raw material prices consolidate at lows, so as to judge the wafer price trend.

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