In March, the price of metallic silicon slightly decreased and was overall in a downward cycle. According to the Commodity Market Analysis System of Business Society, as of March 31, 2024, the reference price for the domestic 441 # metallic silicon market was 14070 yuan/ton, a decrease of 6.2% from the beginning of the month and a decrease of 16.70% from the same period last year. In March, the fundamentals of silicon metal were in a state of weak supply and demand. Due to the downward trend in silicon prices, the production enthusiasm of silicon factories weakened, and the supply side continued to contract. The operating rates of factories in various regions remained low; Downstream also reduced procurement operations due to the decline in silicon prices, resulting in a bearish supply and demand situation leading to a price decline.

Supply side

According to data from Baichuan Yingfu, as of March 21st, the number of industrial silicon furnaces has decreased, mainly from the southwest region. Due to the heavy cost pressure faced by enterprises in the southwest region, their enthusiasm for starting production has weakened. There are 318 silicon metal furnaces in operation in China, with an overall start-up rate of 42.4%, a decrease of 7 furnaces compared to last week.

In terms of inventory, as of March 22, the overall industrial silicon inventory increased this week, with a social inventory of 365000 tons, an increase of 2000 tons compared to last week. Among them, the social ordinary warehouse accounted for 107000 tons, an increase of 2000 tons compared to last week, and the social delivery warehouse accounted for 258000 tons (including unregistered warehouse receipts), which remained unchanged compared to last week. Factory inventory: The trading situation in the spot market during the week was average, with some orders from silicon factories being delivered one after another, while most silicon factory inventory showed a slight increase.

Demand side

In March, domestic polycrystalline silicon saw a slight decline. In March, polycrystalline silicon enterprises maintained normal production, but due to the decline in upstream industrial silicon prices, polycrystalline silicon also had to follow suit. At present, the consumption of industrial silicon by polycrystalline silicon continues to increase, and the ramp up of some new production capacity will bring incremental growth to industrial silicon consumption. However, polycrystalline silicon enterprises have not yet purchased a large amount of raw materials, and the demand for industrial silicon procurement needs to be released.

In March, the domestic organic silicon DMC market showed an overall trend of first rising and then falling. At the beginning of March, the atmosphere of the organic silicon market was positive, with many companies closing off and not reporting, and some manufacturers continuously raising their prices. Some organic silicon enterprises have plans to increase their load in the future, which may increase their demand for industrial silicon. However, the short-term procurement demand of organic silicon enterprises has not been clearly reflected. In mid to late March, due to the decline in industrial silicon prices, organic silicon also declined. We will continue to monitor the downstream delivery of organic silicon in the future.

In March, aluminum alloy prices fluctuated and stabilized. During this period, aluminum alloy enterprises started production steadily, and there was no increase in demand for industrial silicon temporarily

Future Market Forecast

On the supply side, there was not much change in supply in March, and silicon factories basically maintained their current production pace. However, as silicon prices continued to decline, silicon factory production actively weakened, and there was an expectation of a reduction in supply in April; In terms of demand, downstream enterprises are currently cautious in their procurement operations due to the continuous decline in industrial silicon prices, with on-demand procurement being the main focus. There is an expectation of growth in downstream demand for industrial silicon, and with the normal operation of the market, the demand for concentrated replenishment from downstream is expected to drive the market to recover. Overall, the supply and demand side of the metal silicon market in April may shift towards a stable situation of supply and demand reduction, with the fundamentals favorable for silicon prices. If there is a concentrated release of downstream procurement demand, market sentiment will be boosted. It is expected that silicon prices in April may stabilize first and then rise, with the possibility of a rebound after a decline.