Overview of 441 # Silicon Price Trend

In June, the monthly decline of metal silicon was 460 yuan/ton. After experiencing a deep decline throughout May, the decline narrowed, but the price remained at a low level. According to the Commodity Market Analysis System of Business Society, as of the 28th, the national quotation for metal silicon was 13710 yuan/ton, a decrease of 3.25% compared to the beginning of the month. At the beginning of the month, metal silicon operated weakly and steadily. By June 8th, silicon prices had loosened, and supply expectations had increased. Silicon companies in the southwest region had improved their operating conditions, suppressing the continued downward trend of silicon prices. On June 19, there was a change in the opening of the futures market. It was said that the large northern factories had significantly reduced their output, which should cause panic in the market, but it did not have a significant impact on the Spot market for the time being. However, there has been a response from Hesheng Silicon Industry, which plans to gradually shut down furnaces for maintenance, resulting in a brief rebound in metal silicon. But the market is sluggish, transactions are weak, and prices remain weak and stable.

Market analysis

On the supply side

At present, the electricity price has started to settle in June, and the Sichuan region has implemented the electricity price during the high water period, with a price of 0.35-0.38 yuan/kWh. The electricity price in the Sichuan region has decreased. The production profits of the Southwest production area are sometimes restored, and the enthusiasm for resuming production has increased, but the speed of resuming production is relatively slow. Large factories in northern production areas are planning to gradually shut down their boilers for maintenance, with a strong willingness to reduce production. Overall, the disturbance at the supply end of metallic silicon is limited, making it difficult for production to significantly decrease.

Inventory aspect

As of June 25th, the total inventory of metal silicon in the three regions was 146000 tons, a decrease of 4000 tons compared to the end of last month, or 71.8% year-on-year. This month, Kunming Port experienced a significant decline, with a decrease of 6000 tons within the month. Some factory inventory continued to be transferred to delivery warehouses. The inventory changes are mainly caused by inventory transfer, and the actual downstream digestion and destocking quantity is limited.

In terms of demand

In June, the polycrystalline silicon market continuously bottomed out, and the price was significantly reduced to 88333.33 yuan/10000 tons. Polycrystalline silicon itself is in a state of oversupply, operating at a high operating rate of 86%, continuously suppressing prices. The weak prices of silicon materials and silicon wafers have led to some enterprises being forced to undergo maintenance. In the short term, the construction of silicon materials and silicon wafers will be lowered, and the support for metal silicon prices may weaken.

In June, the silicone DMC market saw a slight decline, with domestic silicone DMC market prices referencing around 14000-14300 yuan/ton as of June 26th, a decrease of 1.26% during the month; The current quotation for aluminum alloy ADC12 is 18400 yuan/ton. The trading atmosphere in the organic silicon DMC market has always been light, with the aluminum alloy industry’s main downstream automotive and construction industries in the off-season, and the demand for metallic silicon in both industries continues to be weak.

Future Market Forecast

Overall, the current supply of metal silicon is expected to decrease compared to the previous period, with a slight decline in inventory. However, the continued weakness on the demand side is not enough to support a sustained rebound in metal silicon prices. It is expected that the short-term silicon price is expected to fluctuate at the bottom of the range.